Debt Collectors’ New Credit Reporting Policy Shortens Time for Negative Credit Information on Consumers’ Credit Reports

Encore Capital Group, Inc. announced a change in its credit reporting policies for consumers.  Encore’s subsidiaries include: Midland Credit Management; Midland Funding, Asset Acceptance; Atlantic Credit & Finance.

According to the Encore press release, “A significant challenge with current practices that maintain negative tradelines for seven years, even after a debt has long been paid or resolved, is that many consumers feel their only alternative for nearer-term resolution is to dispute the debt in question. This practice often occurs repeatedly, even if they know the debt was legitimate and they were responsible for its payment. By maintaining that accurate, but negative, information for seven years, the current credit reporting and scoring system provides limited incentive to pay off an underlying debt.”

The new credit reporting policy will remove accounts from credit reports, including payment history, to the major consumer reporting agencies, such as Equifax, Experian and Trans Union, when the consumer has paid or otherwise settled the alleged debt.

Normally, and under the federal Fair Credit Reporting Act (FCRA), derogatory credit information will remain on a consumer’s credit file for seven years, plus 180 days from the date of the first delinquency.  The policy should help consumers because the amount of time the derogatory information appears on a credit report should be less than the 7 years, plus 180 days.

The Adkins Firm represents consumers with credit report and background report errors.  Are debt collectors reporting false information about you on your credit report?  Are you a victim of identity theft and debt collectors are trying to colllect from you or credit reporting false information about you?  Do you have errors on your credit reports and  disputed the false information to the credit bureaus, such as Equifax, Experian and Trans Union?

If you answered yes to any of these questions, then you should contact the consumer protection law firm – The Adkins Firm – for a free case review.