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Exact Date a Furnisher Can Report Tradeline 30 Days Late?

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Looking for some guidance on what date a furnisher can report an account 30 days late. 

 

I’m a mortgage broker, and I have a client that has two 30 day lates on an installment account (auto lease). 

 

The furnisher, BMW financial, has reported two 30 day late payments over the past 33 months of the lease. 

 

The monthly payments are due on the 2nd of each month; four times over the past 33 months, the client has made their payment that was due on the 2nd of the month on the 1st of the following month. 

 

Out of the four late payments, two of the due dates fell in a month with 30 days, and two fell in a month with 31 days. 

 

I‘m aware that the two payments that fell in a month with a due date that had 31 days were made exactly on the 30th day after the due date. For mortgage servicing reporting, an account is reported 30 days late when a payment isn’t made prior to your next contractually payment due; for example, if the February 1st payment is made on March 1st, the account would be reported as 30 days late, even though 29 days have elapsed, since there are two outstanding contractually payments due. If the March 1st payment is made on March 31st, the payment would not be reported as 30 days late, since the March 1st payment was made prior to the April 1st payment being due. 

 

I’m trying to get the client’s score increased by 11 points so they’re eligible for a better interest rate, and I was surprised that BMW Financial reported the payments as 30 days late. 

 

Anyone have any insight on how these are reporting. I’ve read the FCRA, and it seems that the furnisher is within their right to report them as 30 days late. I’ve had the client try to get them removed goodwill, with no luck. 

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Interesting. It appears BMW Financial is going by the flip of the calendar months for reporting. Are there any instances in your client's history where the payment is made on the last day of the same calendar month in which it is due?

 

1 hour ago, seanote said:

The furnisher, BMW financial, has reported two 30 day late payments over the past 33 months of the lease.

 

Out of the four late payments, two of the due dates fell in a month with 30 days, and two fell in a month with 31 days. 

So is it two or four?

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Does the lease contract indicate how BMW counts days? When the payment was made, how many days did it take to process the payment? Did the consumer also pay any associated late fees at that time?

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1 hour ago, IndyPoolPlayer said:

Interesting. It appears BMW Financial is going by the flip of the calendar months for reporting. Are there any instances in your client's history where the payment is made on the last day of the same calendar month in which it is due?

 

So is it two or four?

 

I read @seanote to be saying that when you count the number of days between due date and late payment, there were 4 payments which were made 30 days after the due date.  However, BMW Financial has reported just two of those payments as late, ignoring the two payments which were made on the 1st of the month when the previous month had 30 days (rather than 31, as in the other two cases that were reported).

 

To my knowledge, I thought it was universal that credit reporting worked on a "30-day" calendar.  Thus, a payment due on (m)/(dd) becomes 30-days late when payment isn't received by the start of business day (m+1)/dd.  A payment due Jan 5 is 30-days late on Feb 5; a payment due Feb 5 is 30 days late on Mar 5, etc.  Actual number of days in the month is ignored.

 

The effect of this interpretation is that a payment doesn't qualify as 30-days late until a new payment due date arrives.

 

I tried to review guidance on this at the CDIA (originator of Metro-2 data specification for consumer credit reporting) website, but all such information is privileged to reporters (it appears that non-members may purchase a summary of guidelines -- but I can't' say for certain that this information is actually spelled out).

 

If I'm accurate in my understanding, then none of the payments fell within this definition of 30-days late.  Seeking correction of of the reporting, on this basis, can be tricky ...

 

The most expedient route to a correction would be to convince BMW Fin'l of the inaccurate reporting.  If CDIA documentation spells out their reporting standard for a 30-day delinquency and it's consistent with what I've suggested, presumably entering a dispute with BMW Fin'l directly, citing that documentation, ideally would yield deletion of the reported delinquencies.

 

Failing cooperation by BMW Fin'l, a dispute can be entered with the CRA's reporting the tradeline.  Absent specific intervention in the dispute, each CRA will merely enter a request to BMW Fin'l to confirm or correct the reporting.  That outcome is a given, if they previously refused a correction.

 

The next step with the CRA will be to escalate the dispute, saying that BMW Fin'l isn't reporting consistent with established standards, and that it's incumbent upon the CRA to delete the reporting as a consequence.  I have no experience with such action, but there are documented instances where failure of a CRA to act on such a documented claim has resulted in suit, with finding and damages to the plaintiff.

 

 

 

 

Edited by hdporter

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Are you sure they actually posted on the 1st? I would expect that if the payment was made and posted by the 2nd of the following month, no LP would be reported. But they may not have posted until the 3rd and then it would definitely be 30DL.

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4 hours ago, shifter said:

Are you sure they actually posted on the 1st? I would expect that if the payment was made and posted by the 2nd of the following month, no LP would be reported. But they may not have posted until the 3rd and then it would definitely be 30DL.

Hi @shifter I received the complete account history from the client, which was provided by BMW Financial. All four of the payments posted and were applied to the account on the first of each month following the payment due date of the second of the prior month. Even though there were never two payments outstanding at the same time, BMW reported two of the four payments late because the due dates for those two payments fell in a month with 31 days, so technically the payment on the first of the month was exactly 30 days past the due date of the second.

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well, even if they were going by a strict 30 calendar days, technically that's still 29 days late. it's not 30+ days late until the 31st day. so I would be all over them for that kind of reporting.

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Another potential variable here is if they had been playing the call in at 5:01P to make a phone payment, with the cut-off for posting in that business day having been 5:00P.  Same thing with some who have made online payments after a defined cut-off window.  The protestations notwithstanding, the reality is that such a payment is STILL late...the banks are all VERY clear about WHEN a payment needs to be made in order to be considered 'timely.'

 

This sounds like someone that was always juggling too much debt and got a bit too close to the fire on more than one occasion...eventually you DO get burned.

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15 hours ago, shifter said:

well, even if they were going by a strict 30 calendar days, technically that's still 29 days late. it's not 30+ days late until the 31st day. so I would be all over them for that kind of reporting.

 

Working with 30 days, and assuming payment was due on the 1st (for the sake of illustration), A payment due on Apr 1 that's received at any time on Apr 30 is received 29 days late.  If it's received at any time on May 1, it's 30 days late.

 

The 30+ late bracket reports any payment made on or after  30 days past the due date.

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Maybe but technically that's incorrect. A payment due on May 1 isn't due until the end of May 1. So if paid on May 2 it's less than 1 day late. In my experience you have to miss two payments to get a 30DL. So as long as you pay the account on the second due date, you are not two payments behind. I payed my mortgage this way many times in the distant past. You rack up late fees, but no derog reporting. 

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