One of my recent Chapter 7 clients (case successfully discharged) wrote me to say that he has noticed a disturbing occurrence on his credit reports. He advises that positive credit information (a paid off home mortgage and five other paid in full accounts) are no longer showing up on his credit report. Positive credit, of course, helps your credit score go up.
I did some research on this issue and found the Federal Trade Commission’s Official Staff Commentary Section 607 item 7, which reads:
Consumer reporting agencies are not required to include all existing derogatory or favorable information about a consumer in their reports. (See, however, discussion in section 611, item 14, infra, concerning conveying consumer dispute statements.) However, a consumer reporting agency may not mislead its subscribers as to the completeness of its reports by deleting nonderogatory information and not disclosing its policy of making such deletions.
I read this as meaning that credit reporting agencies may delete favorable information as they wish, just as they may delete unfavorable information before the 7 year maximum reporting time for unfavorable information. Presumably, however, it is misleading for a credit reporting agency to purge your file of positive information before the 7 years period but retain adverse information without disclosing its policy about how it retains and deletes information.
My client indicates that he has written a challenge letter to the credit bureau in his case – I would suggest to him that he include in his challenge a request for a copy of the policy statement about how the credit reporting agency purges data that was sent to the credit bureau’s members.