Every now and then the listserv for the North Carolina Bar Association’s Bankruptcy Section lights up with a discussion which is of interest to creditors. One such discussion occurred recently regarding the duty of a creditor to report payments to the credit reporting agencies. The question posed involved a mortgage lender who, in a bankruptcy, had a debtor execute a re-affirmation agreement and apparently implied in turn that it would report payments to the credit bureaus. The lender did not report subsequent payments so the question was whether the failure to report constituted some sort of Fair Debt Reporting Act violation.
The answer seemed obvious but took a while to sort itself out to a certainty and to a lesson which could be shared. The system with the credit bureaus is completely voluntary and there are no sanctions for failing to report to the bureaus. The requirement is that what is reported must be accurate. And, if a creditor chooses to make an initial report, then the creditor must either (a) update the initial report periodically regarding the status of the loan/account in order to keep it accurate “in real time”; or (b) must delete the initial report and leave nothing in its place.
As with most credit reporting issues what matters the most is that whatever you do, be truthful and accurate.