Understanding Activity Dates

August 8, 2012

Credit Score

Understanding Activity Dates

Understanding Activity Dates

Your credit report is perhaps one of the most important factors determining your financial health. The report, and its resulting score, can determine the amount of credit you can obtain and the interest rate you will pay. It can also keep you from receiving a promotion, gaining employment, or renting an apartment, if it is too low.

Managing your credit report requires constant diligence and understanding of how the report works. Knowing your rights as a consumer is crucial to properly managing your report.

Nearly Every Credit Report Has A Mistake

The government has recently released a report stating that 80 percent of all credit reports have at least one mistake posted on them that adversely affects the report. The report went on further to state that 77 percent of those 80 percent contain two or more errors that affect the report in a negative way.

It is critical to regularly obtain a copy of your credit report and review it for errors.

The most common errors found on the report are:

Misspelling of names. This adversely affects your report because it concludes that you are trying to obtain credit under alias names.
Incorrect credit limits and balances. When a balance or credit limit is reported wrong, your debt to available credit ratio is skewed, which has a negative impact on your report.
Collection accounts have incorrect activity dates. Activity dates are very important when it comes to negative accounts on your report. These accounts can only be reported for seven years. If the activity dates are incorrect, it will remain on your report for too long.

How To Determine Activity Dates

Under the Fair Credit Reporting Act, the last date of activity is the last date that the original account had any activity on it from the consumer. Original creditors and collection agencies must honor this last date of activity, and the debt can only be reported for seven years from this date.

Many collection agencies like to change the last date of activity to the first day that they obtain the account. This is not legal, and these accounts must be changed to reflect the actual last day of activity. Consumers can dispute these dates and have the item removed from their credit report. In addition, if the company does not remove the account, there are legal actions that can be taken against the company.

If you conduct any negotiations with a credit collection company, however, you will create a new date of activity, and the account can be reported until it is repaid. At that time, the debt will be reported as a collection account that is paid in full and will remain on your account for seven years from the last payment date.

Bankruptcy and other court documented debts will remain on your report for 10 years. It is important to check these dates also. Many dates are incorrect because the reporting agency places the last date of activity as the day they enter the information, and not the date of the final judgment.

Tax debts and student loans will remain on your credit report indefinitely, regardless of activity date.

Author’s Bio: Steven Garcia is a well known author and writes articles related to finance. For more information on the same visit the website Creditreport.org.

Understanding Activity Dates

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