sol and 7 year credit reporting

HI.
The SOL under state laws and the Credit Reporting Period under the FCRA are two entirely different animals.

The SOL varies from state to state and by the type of account. For example in Texas it is 4 years for Written or Oral Contracts, as well as open accounts or promissory notes. While in Illinois it is 5 years for Oral contract, 10 years for Written Contracts, 6 years for promissory notes and 5 years for open accounts. However under the Fair Credit Reporting Act (FCRA) a negative report can remain on your credit reports for up to seven years from the date of last activity. For example a credit card was charged off on December 1, 2003, it can remain on your credit reports until December 1, 2010.

For both, if you make a subsequent payment, that will restart the clock on both the State SOL, as well as the Credit reporting period under the FCRA (as a new activity has taken place). This is why it is very important to know the status of any account you currently have, or have had in the past and to keep detailed records in the event you may have to dispute an item on your credit report, or with a bill collector in the future.

If you have an item which is out of the SOL, which you wish to pay (say to clear your moral conscience), you might be able to use the Credit Reporting as a bargaining chip. For example, offer immediate payment of the full amount if they will agree in witting to delete or change status on a negative reporting account. charges from (for example) Open Charge off to Paid charge off, will help some what improve your credit score, however, they are still considered negative, and will ultimately keep your credit scores low. Try to negotiate a report of simply "paid" or "paid in full". Even "Paid Settlement, while better than an open negative account, will have a slightly negative effect on your credit scores.


Also, never make any payments on a closed account, or an account in collections, etc with out a written agreement and understanding of both parties of what you are agreeing to pay, and what the creditor or collector is agreeing and expected to do.

Once you have this accepted agreement in place, they you never pay with a personal check credit/ debit card. Make these payment ONLY with Money order, Cashiers or Certified Check, sent Certified Mail Return Receipt. While this may cost about $5.00 to $7.00 depending on where you get your payment instrument from, it is a worth while investment to document that the payment was made and accepted as agreed. Money orders and Certified or Cashiers check can also be traced to verify they have been cashed. Hope this all helps.

simplysuzie, the other collection agency calling you should give the information of the debt in writing. Get the debt validated so that you know about their legal collection practices. If you feel about being harassed from them, record their phone calls. Check the laws in your state before doing this because in a few states, the person needs to take the permission of the other party before recording the phone call.

Which company did you pay earlier? Did you get the receipts from them?

Thanks to both of you. I paid a collection company called Alegis Group. I have cancelled checks but nothing stating it was settled. I disputed the new collection agency's report (OSI) and the CRA left it saying it would drop off in June of 2007. That's why I was wondering if it was uncollectable and sol. Doesn't look like they reaged the debt.

We had something like that with an old Sprint bill of my hubby's that was out of the SOL in May and it also had dropped off his credit report this summer. It has been sold to many different collection agencies so his debt consolidation company just sent a cease and desist letter on his behalf to the latest CA. There was one company late last year that refused to give us a physical address.