This topic was discussed exactly a year ago to the day... Here's what Ray had to say on the subject at the time:

/threadview/1415.html

"This issue needs to be straightened out.

I spoke with the legal depts of both credit bureaus because many definitions of the terms they use are ambiguous to say the least. Anyone else (and that's just about everyone) who's confused about their policies should do the same.

The information drunkbeerguy gives is incorrect. It doesn't make any sense that paying off a debt will harm your credit. Conversely, it may not help it much if it's already R9, but it's not going to hurt it either. Obviously, some stuff was misreported on his credit files due to incompetent or lazy collectors and was not later corrected.

On both the TransUnion and Equifax reports, the "date of last activity" on an account doesn't change once it goes into default with original creditor as I mentioned yesterday.

However, the term may be used by Equifax somewhat ambiguously. Sometimes it refers to the date of last payment with the original creditor; other times it refers to the date of write off. The variation exists because, as long as the account remains with the original creditor, it gets included under the "trade" line section and a creditor might classify any of these actions as a "last activity." Only when the account gets sold off and goes to external collection is there a dual entry under the "collections" section of the report

But the key thing is the "date of last activity" is always supposed to refer to the date of default with the original creditor and thus remain invariant. Regretfully, this doesn't always happen because of collection agency abuses and ignorance etc. - but that's the way it's supposed to be.

For example: Suppose I have a line of credit that goes into default with BMO in 2003.

If I make a payment on it today, whether in whole or in part, that DOES NOT change the "date of last activity." And so, irregardless of whether I pay it off or not, it's going to come off the "trade" section of both of my credit reports in 2009, not 2014!

Now suppose the same BMO delinquent line of credit is later purchased by a debt buyer. In this case, the account will be also listed in the "collections" or "public records" sections of the TransUnion and Equifax reports respectively. There, the debt will have attached to it a debt buyer's reference number (usually 6 or 7 digits) which identifies the details of the debt when it was with the original creditor. It will also include the "date of last activity" on the account which doesn't change irrespective of any subsequent payments made on it.

In this case, if the same BMO line of credit which originally went into default during 2003, is bought up by a debt buyer in 2007 and I pay it off in 2008, the account is still supposed to go off my credit reports in 2009, not 2014!.

Please note: I made a small error yesterday with regard to something I told blogger "digimoose." It unfortunately occurred because Equifax has misleading info on their website policy page concerning the orderly payment of debts.(OPD). As well, information given to me in previous conversations with staff was partially incorrect. Their 3 year OPD reporting rule only applies if the original debt was less than 3 years old. If it's more than that, the 6 year limit prevails. Digimoose had a defaulted debt whose date of last activity was in 2004. I told him that if he paid it off tomorrow, the debt would come off his TransUnion Report in 2010 and his Equifax report in 2011. Thus it should also come off his Equifax report also by 2010, not 2011.

Again, it's entirely possible that once a debt is paid to a debt buyer or collection agency, they may erroneously shunt the "date of last activity" on the account forward. When that happens, you have to contact the credit bureau with the account's reference number which will yield the true "date of last activity" and thus force the bureau to make the necessary correction.

Those wishing confirmation or further details should contact

TransUnion Legal at

privacy@transunion.ca

OR

Equifax @ 1-877 323-2598

Ray "

There are some creditors that will not change the date of last activity and some will, when you pay or settle your account.

yes so if you pay it the date of last activity becomes the day that they recieve payment so then it will be removed from that date. The date of last report is not what they use to eliminate the debt.

Why would it be another six years..
equifax hs 2

date of last activity
date last reported

its always 6 years from date of last activity

If you pay it, the creditor can update your date of last activity and the debt could remain on your file for another six years. If you going to settle or pay your debt have the creditor state in writing that they will not change your date of last activity before you hand over your money. If they don’t agree, then wait a year till it comes off and then settle the debt for a lower amount.

Thanks Reggie,

So just to confirm, if i pay it will still go away in one year?

And could you please PM me the name, it is only one debt.

1) If I repay the debt in full (or if I settle it with the collection agency) will it still vanish from my report in one year, or have I reset the date of last activity by doing this?

It will remain the date of last activity: 5 years ago
The day u pay will be: Last Reported

2) Your SOL is 6 years from day of default so technically they have 1 year to get the money legally, since its been 5 already - what are the chances they will do it within 1 year
Acknowledging debt is like a grey area..I mean how would u settle if u dont accept it. If I were u , I would settle it and let it done by a debt settler so u are not directly involved. If its just one debt, then I can PM u a debt settler who has settled my accounts and she was recommended by Richard C here ( who runs totaldebtfreedom.ca )

3) It will go away next year so u can wait and let it disappear, but that doesn't stop them from calling u. If starting fresh, then I'd rather pay if off

My personal experience, my scores have gone higher as I went settling contrary to what I heard

I currently have a 5 year old collection on my report from a University (from the university itself, not a loan) that is now one year from vanishing from my report. While I am now in a financial state to repay this, and feel I have a moral obligation to do so, some research has led me to believe this may actually hurt my credit rating due to changing the date of last activity on my report...

Can someone clarify a few points for me?

1) If I repay the debt in full (or if I settle it with the collection agency) will it still vanish from my report in one year, or have I reset the date of last activity by doing this?

2) If I attempt to settle with the collection agency and fail am I resetting the date of last activity, essentially damaging my credit further by making it a current issue and potentially reopening the Statutue of Limitations?

3) As it was never a credit account, is there any way to negotiate this off my report? I'm really ready to get on with my life.

If it is pertinent, I am in BC.

-JV