mdawg wrote:Let me paint a clear picture....
Twelve years ago I ended up owing over a million in unsecured credit that I never paid. I had had spotless credit all my life and just built it up (Today I'm still a youngster, not very old yet). Twelve years ago, I had some financial problems that resulted in my inability to pay my debt , and then I decided rather than just owing a little I'd just max everything out and have a big party so to speak and get all I could. I mean, why go under for just a little - I took it all.
I never did pay any of it, and very few of the credit card companies went after me in any significant way. Several sued me and only a few were able to even locate me to serve me with the lawsuits, so I ended up with just a few judgments totaling only about $150K. I've always been careful with my assets being in trusts and such so no one has ever collected a dime from me in any lawsuit anyway. I never needed to file bankruptcy.
I'd get into the details of why they could never locate me or why my assets and income were so well protected, but then that isn't what this post is about.
Twelve years later - today - I still have one judgment left on one of my credit bureaus (only on one, the rest show no public record whatsoever), but the rest have dropped off my credit profiles, so my credit score is in the upper 700s again. I am sure it was in the toilet prior to the "seven year rule" resulting in the drop off of all those derogs, but anyway the above is just to add context to my question.
Today, I have many high limit credit cards again. Not adding up to anywhere near a million, but then These are Different Times and anyway, I'm not shooting that high, at least not today. I have very good income and I can afford to pay all my cards, and I don't even keep a balance on any of them, I just pay off at end of the month, if not sooner. My total available credit right now is about 100K.
My intention today is to maintain my good credit indefinitely.
I have re-established credit with a lot of the same creditors I stiffed in the past. At first I figured that they didn't even have any record of my past transgressions, but then it seems that some do have long memories, because recently when I phoned for a credit line increase one of them asked me why my accounts were charged off twelve years ago, and after I gave them the explanation they obviously wanted to hear (was having financial difficulties), that creditor went ahead and jacked up my credit line anyway.
So, my point being, that creditors do forgive and forget.
But not, so far, American Express.
I applied for the same Platinum card I had twelve years ago and was instantly denied on the basis of "in as much as your prior account was cancelled." True, I stiffed AMEX for about two hundred large and never paid them, but then they never bothered to sue me (at least not successfully) anyway, and so I don't owe them anything anymore. The debt is legally extinguished.
MY QUESTION IS: is it a violation of the Fair Credit Reporting Act (FCRA) or any other rule or law that a creditor use something that is over seven years old against you? Obviously negative credit may not appear with a credit bureau seven years after last payment or recording of judgment, which is why my credit is near spotless again, but may creditors use charged off debt against me anyway? It seems that using negative matters that are over seven years old against a creditor is against at least the spirit of the FCRA.
AND, regardless of whether they may or may not, what have others experienced? Has anyone re-established credit with AMEX seven or more years after being cancelled with them?
The answer to your question is No. It is not a violation of the FCRA or anything else for that matter for Amex to consider their history with you. The FCRA regulates credit reporting, not information a creditor has based on their own records with a customer.
What you did (go out with a bang maxing all your cards intentionally), in industry parlance, is bust out fraud. It's not looked on favorably. This is not a judgment, it's fact. You are lucky they didn't do a debtor's examination with you under oath to identify and break your trusts. It's expensive but sometimes done if enough money is involved.