|Received:||5/22/2006 10:36:49 PM|
|Subject:||Procedures to Enhance the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies|
|Title:||Advance Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Parts 660 and 661|
Comments:Require that the payment history be frozen for credit reporting purposes as of the date an account is closed, paid, zero balance, whether the account is paid by the consumer, or charged to profit and loss, or sold to a third party junk debt buyer. An account that is charged off, even if subsequently paid by a consumer trying to catch up from hard times, finds the reporting of the trade line continues to hurt his scores in the same manner as a recent serious delinquency because data furnishers report a fresh charge off monthly for the duration of the seven year reporting period. Longer, if the account has been re-aged. When an account is brought to a zero balance, there should be a way to freeze the pmt history as of the date paid. Additionally, CRAs, and Equifax in particular, should be forbidden to report an account that is closed, paid with a zero balance as "CURRENT STATUS OVER 120 PLUS DAYS LATE." How can an account that is closed, paid with a zero balance currently be 120 days late? When an account is paid and the balance brought to zero, even if it were late at the time of the final payment, it is no longer 120 days late and to report it as such is false and misleading. The use of 120 days is not just a fill-in-the-number example. Equifax marks accounts at currently 120 plus days late even if they had, in fact, progressed to 180 days late and charge-off. They do so in order to hurt consumers scores more severely. In combination with failing to disclose the commencement of delinquency and the date closed, such reporting has severe impact on a consumers score. Consumers should not have to litigate or threaten to sue to correct this standard practice of Equifax. Most consumers have neither the time nor the means, much less the knowledge, to pursue this in court. Finally, as long as paid charge-offs are equally injurious to consumers' FICO scores as unpaid charge-offs, there is no incentive for them to pay the outstanding balance on such accounts, particularly when paying such an account almost always results in the updating of the status date and date of last activity. Consumers are severely penalized for trying to pay these outstanding accounts because of the way the dates on their accounts are manipulated to make the delinquency appear recent.