Credit Reporting Agencies to change how long negative accounts report.
Are you one of the millions of people that have fallen victim to the difficult financial times in this country? Times that have led to the enormous number of foreclosure procedures, bankruptcy declarations, and your credit decreased in the last few years. Perhaps you know someone who might have. More and more individuals and families in the United States are seeing their lives and dreams fade away due to our economy and financial crisis. Situations and circumstances beyond our expectations have drastically, negatively affected the lives of many. And the worst part of all this is, that the worse might not be over yet. Changes in our daily financial lives have forced many to seek help either by means of debt management, foreclosure and/or bankruptcy. A decision made not by choice in many cases, rather by circumstances.
Currently there are a great number of foreclosure filings every month, and a great number of these will end up as a repossessed property. Even if that is not the case, the reality is someone’s credit rating will be affected. The job market is slow at recovering and as such, many individuals are finding it harder to make ends meet, and consequently may default in one or more of their financial obligations. The financial burden (s) many have experienced, others are experiencing and many more are to experience, will be reflected by the consumer reporting agencies as Section 605 (1 – 5) of the Fair Credit Reporting Act state as follows;
(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.
(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.
(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.
(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.
(5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years. “http://www.ftc.gov/os/statutes/031224fcra.pdf" Then go to page 22.
As per the above, any adverse information (the reporting of a late payment by your creditor, a collection account, a bankruptcy, a civil judgment, etc.) that can be reported to any of the consumer reporting agencies can remain in your credit file for up to seven (7) years. A chapter 7 will remain for 10. Given the financial crisis this country has experienced over the past few years and is still going through, it might be a bit unfair to impose a seven year period before negative information is removed from an individual’s credit report. As a nation, we do not have seven to ten years to rebuild our economy, rather a shorter timespan for such. We, unfortunately, are a credit oriented nation. Allowing individuals who circumstances deprived from their financial goals and dreams the opportunity to achieve such in a more efficient recovery manner, will not only help the individual or household, but more importantly, our economy as a whole.
Creditors should now know better than to over extend credit and surely will exercise caution. Eventually, they will make better judgments to ensure their losses are far less, which in turn will allow them more revenue, will create job opportunities and boost our economy. The wave of credit applicants will open doors that would allow individuals the opportunity to seek or pursue their dream of homeownership. With lenders being overstocked with foreclosed properties, this would be a welcoming idea that would also create additional jobs and revitalize communities. All in all, having or being able to establish credit after having faced financial difficulties is in a great sense, not only an opportunity of redemption but also one to make better financial choices.
For these and many other financial outcomes that would help uplift our economy, I would like to request that Section 605 of the Fair Credit Reporting Act be revised, and that the seven years be limited to four years and the ten years reduced to seven. Additionally, a dismissed bankruptcy means that either the bankruptcy trustee did not approve the case, or that the individual did not pursue their intent when filing such. Consequently, as with any dismissed civil or criminal case, these should not be reported by any consumer reporting agency, or should be limited to no more than 2 years from the date of filing. Though the filing can and will remain part of public records, it is still a dismissed case and nothing else came from it. As such, it should not negatively impact an individual’s creditworthiness for seven years, much less ten. Finally, a judgment should be based on the initial default date that led to such action, and not on the date file as that could be a few to several years later.
It is for these reasons that I ask you the reader, to please sign my petition. We need a positive change and one that would help stabilize our economy, and create jobs. Thank you for reading. Please share with those you know will support these views or may benefit for this change. Greatly appreciated!