Lesson Learned: check your credit report often

May 5, 2011 1:26 PM

Last year I went on a hardship repayment plan with my Bank of America visa. No problem...until I see my credit report!!! They are now saying I should have known better, and there is nothing they can do. Do I have legal recourse to force them to revise my credit rating?

The hardship repayment plan basically cut my payments in half, and allowed me to make timely, monthly payments. Great, I thought.

Accept when they started me on the plan, I was one month past due. That one month past due amount carried over EVERY MONTH FOR A YEAR. The payments were being automatically withdrawn from my checking account, so like an oblivious, trusting consumer, I assumed everything was rolling along nicely. Except that BoA was reporting me 30 days late every month (it would go late, the payment would process, repeat). I called them and explained that I have made timely payments every month but they said there is nothing they can do to retroactively adjust the credit reporting. ( I spoke to someone in the office of the president who investigated and got back to me three days later).

I am not trying to lay blame - obviously it's my fault. But do I have any grounds to get the negative reporting removed considering my good faith effort to continue paying?

posted by archivist to work & money (13 answers total)

A similar thing happened to me with Bank of America (for three months) – did you not open and look at the statements they mailed and/or emailed you for an entire year?

Believe them when they tell you there is nothing they will do for you (even if they could). It's about five years later now, and my credit score is fantastic, so it's not the end of the world.
posted by halogen at 1:45 PM on May 5, 2011

What did your statements say each month?

If the information is correct you have limited legal recourse for getting it removed. A credit report is about what you actually do with your debts, not what you wanted/hoped to do with them, so "effort" that didn't result in full and timely payments means nothing to future lenders.
posted by nomisxid at 1:50 PM on May 5, 2011 [2 favorites]

They can in fact change what's on your credit report. They won't, but they *can.* When they say "we can't" they don't mean that there exists no method for doing so, it means that it's against their policy to do so.

Meanwhile, get that account current. A 30-day past-due is not necessarily a major blemish even if it persists for months. It should stop impacting your credit score fairly quickly once the account is no longer late.
posted by kindall at 1:51 PM on May 5, 2011 [2 favorites]

If BoA refuses: From experience, you should file a discrepancy report with one of the credit companies whenever you can. So, say you can do it every 30 days, whenever your request comes back denied, try again. They are bound to either a) notice the mistake/problem or b) let it fall through the cracks one month (they only have 9 days I think to process a denial, after that it's approved automatically). This happened to my ex and it worked. LA Fitness put his gym contact on his credit report as a loan, and when he cancelled within the allowed "trial" period, they left the loan on his report so that for years it looked like he was delinquent on the account. Really, he canceled, but LA Fitness refused to fix their mistake over the phone. Eventually they either missed the window or fixed the mistake on the report.
posted by two lights above the sea at 1:57 PM on May 5, 2011 [5 favorites]

Alternatively you can add a statement to your report, but I am not sure you can explain this one away. "I thought I was making payments on time" isn't really going to fly.

Also, a credit score isn't the end all of everything.
posted by cjorgensen at 2:04 PM on May 5, 2011

You might want to talk to an attorney familiar with consumer law and the FCRA. There might be an argument that BofA's new agreement with you supercedes the old agreement and hence, all subsequent payments were timely and in full per the contract. IANYL, but that's what I'd explore.
posted by Hylas at 2:10 PM on May 5, 2011 [1 favorite]

My take on the situation:

They agreed to change the terms on your account. The way they're reporting the history doesn't reflect that change. Therefore, they should update the history that they're reporting on you so that it does reflect that change.

(On preview, this is similar to what Hylas is saying...)

That stated, there are a lot of small details that can complicate things. For example, did they really change the terms on your account, or did they just agree not to send you out to collection if you made a smaller payment? If the latter, the history reported would be accurate and it would stand. Really figuring out the fine details of a question like that might be beyond you or I, might require a lawyer.

Other minor annoyances:

--Exactly how you get reported to the 3 bureaus will depend on what the software interface between BofA and the bureaus will allow. There isn't leeway for a person at BofA to be infinitely creative. When they say "nothing they can do to retroactively adjust the credit reporting", what they really mean is there's nothing they can easily do. Back in the day, there was a set process to handle situations like this, but it was manual, for just one account. It's probably a technical and/or policy hassle on their end to handle a one-off change when they're doing a huge data dump to the bureaus at regular intervals. Getting past that could involve persistence and working your way up the phone tree.

--You can file a dispute with the credit bureau. It might work, but no guarantees. BofA could come back and say you were in fact past due, and as mentioned above, they might technically be right. Or, someone could make a mistake or overreact and remove you from reporting--it's been known to happen.

--There's no legal requirement that says anyone has to report on anyone else. There might be a line in the contract between BofA and any given credit bureau that they have to report on most or all BofA customers, that might prevent them from arbitrarily omitting someone. But there might be leeway for a decisionmaker at BofA to flag your account as not being reported, if there's some reason for it--like a dispute. Again, getting this could mean further persistent phone calls.

However, note that if your account becomes prompt later, and it's not being reported, you'd actually lose the benefit of having that extra prompt account in your report.

--You have the right to place a statement in your account, but in the past, I've seen cases where persons have placed statements in their accounts that lasted long after the situation being apologized for had aged away. I'm so sorry about the late payments! Um....what late payments??

--There's lots worse things you could have on your report. Believe me, I've seen them. The path of least resistance would be to make sure you're currently being reported as up-to-date, and let the slow payments age off in a year or two. Requires no lawyers or persistent phone calls up the BofA management hierarchy.

(Me: not a lawyer, but I have worked in the credit industry.)
posted by gimonca at 3:27 PM on May 5, 2011 [2 favorites]

Keep in mind that it's not BoA that ultimately amends your credit report. That is the sole purview of Equifax/Experian/TransUnion. Most credit reporting agencies have a process for challenging items on your report.

Of course, if you don't want to be bothered, you can pay a third party to do the same thing on your behalf.
posted by Civil_Disobedient at 5:42 PM on May 5, 2011

Are you planning on obtaining a loan any time in the near future? If not, don't worry about it.
posted by gjc at 7:07 PM on May 5, 2011

It's most certainly possible for them to correct it. It's a matter of willingness. For example, I canceled a Capital One card the month before an annual fee was to be charged. For some reason, the cancellation didn't process and they charged me the monthly fee, then a late fee and interest a month later and so on.

After a while I noticed the 30 day late on my report and called up Capital One and they, to their credit, resolved the problem immediately and all the charges went away retroactively and the reporting was fixed.
posted by wierdo at 8:20 PM on May 5, 2011

Dispute any negative marks in your credit report with the credit reporting company. If the creditor does not confirm to the credit reporting company the negative information is true, it comes off your report. Many creditors don't bother to respond to to these requests (even if the negative information really is true) if there's nothing in it for the creditor.

Right now you are asking BOA to do "extra" work to make your credit report better, and they don't want to bother. If you reverse the situation so that they now have to do "extra" work to keep the negative information on you file, they may still not want to bother. You are already paying them as agreed and thus there's no profit motive to hold your credit score hostage to try to get you to pay them.
posted by Jacqueline at 9:43 PM on May 5, 2011

The word you are looking for is goodwill. And yes, they most definitely can retroactively change anything they want. Google, e.g., goodwill deletion, sample goodwill letter, and so forth. The trick with goodwill deletes is persistence and trying different addresses (so I've heard; I got the one I needed on the first try, and it was B of A come to think of it).

Goodwill letters typically involve admitting you screwed up, so either be careful exactly what you admit to having screwed up, or do this after exhausting remedies that would involve denying the lateness, such as what Hylas suggested. (I am not familiar with the new legislation.)

Good places to learn about this are the creditboards forums and the myfico forums. Again, they can do anything they want.
posted by salvia at 1:20 AM on May 6, 2011

Thanks everyone. The advice that resonates with me is: Consult a credit lawyer about the terms of my hardship repayment plan replacing the original terms. If nothing, try sending a goodwill request letter to BoA. If nothing, progressing letters of dispute directly to the credit reporting agencies.

From what I have read on the forums that Salvia pointed me to, this can take some effort but it can be done.
posted by archivist at 5:03 PM on May 7, 2011