Navigation:  Loans > Loan Screens > Credit Reporting  > Coding of Derogatory Credit Status

See the following topics that explain how the system reports those accounts with a derogatory credit status (bankruptcies, repossessions, foreclosures, and charge offs):

 

Date of First Delinquency

Hold Codes

Reporting an Account in Bankruptcy

Repossesion

Reporting an Account in Foreclosure

Reporting an Account as a Charge-off

Reporting a Deceased Person

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Date of First Delinquency

 

The Date of First Delinquency (Base Field 25), according to the credit repositories' definition, represents the first date of the delinquency.

 

If a furnisher reports information concerning a delinquent account placed for collection, charged to profit or loss, or subject to any similar action, the furnisher must, within 90 days after reporting the information, provide the Credit Reporting Agency (CRA) with the month and the year of the commencement of the delinquency that immediately preceded the action, so that the agency will know how long to keep the information in the consumer’s file. —Section 623 (a)(5) in the Fair Credit Reporting Act (FCRA).

 

The date of first delinquency for all accounts that have a Credit Bureau Account Status greater than 11 is established on the Actions/Holds/Event Letters screen with Action Code 94 or 194 (Credit Bureau Date of Occurrence) and the corresponding action date. The Credit Bureau Account Status is shown on the Credit Reporting Report and Transmission reported to the credit repositories.

 

Afterhours update function 73 will process the business night before the Due Date day and at monthend and will determine the Credit Bureau Account Status and modify Action Code 194 and the date when necessary.

•Action code 194 and the corresponding action date will be used to report the date of first delinquency for a delinquent loan to the credit repositories.

•Afterhours update function 73 automatically adds or deletes an Action Code and date in the Action Code/Action Date fields for delinquent loans. This function only runs the business night before the Due Date day and at monthend.

The update feature works as follows:

1.All updating (updating the status, adding or removing Action Code 194, and the action date) will occur during the afterhours on the business day just prior to the Due Date and at monthend. This updating is not part of the credit reporting processing. The updating is not connected with the posting of payments, reversals, etc.

2.On the night the update function processes for the account, the system will compare the run date to the loan due date. If the loan will be owing more than one payment on the next business day, the Credit Bureau Account Status is established and Action Code 194 will be placed on the account and the loan due date will be placed in the Action Date field. The action date will be reported to the credit repositories as the date of first delinquency. The action code and date will remain on the loan until the loan becomes current.

3.If the loan is still delinquent the next month, the system will compare the run date to the loan due date and update the Credit Bureau Account Status. Since the loan is still delinquent, the system will look for Action Code 194. If an Action Code 194 is present, the updating will not change the Action Code 194 and the date.

4.If the loan is still delinquent the next month, but payments have been paid, the system will compare the due date to the run date to determine how far delinquent the loan still is and update the Credit Bureau Account Status for that loan. Again, a check is made for Action Code 194. If the Action Code is present on the loan, no further update will occur. The original action date for Action Code 194 remains unchanged on the loan.

5.If the loan has been delinquent in the past but is now current (not owing more than one payment), Action Code 194 and the action date on the account will be removed. (The next time the loan becomes delinquent, a new Action Code 194 and action date will be added.)

6.Action codes and dates are file maintainable. There may be cases where your institution may want to change the date or add Action Code 194 and a date to the account. For example, you may want to add or change these fields for a returned check or payment reversal received just after the last monthend. Also, you may want to delete codes and dates if payments were misapplied, etc.

7.Action code 194 is used in addition to Action Code 94. Action code 94 and the corresponding date is required by the system when a hold code for foreclosure or bankruptcy is placed on the account. If an account has both an Action Code 94 and 194, the date associated with Action Code 94 will be reported as the date of first delinquency, if the associated hold code is still on the account. Action Code 94 is automatically placed on an account when a Bankruptcy transaction is run. See Results of Bankruptcy on Accounts in the Bankruptcy Detail screen help for more information.

8.The Action Code 94 date is only used when an associated hold code (4 or 5) is on an account. In the absence of a hold code, Action Code 194 and a date is needed to establish the proper first date of delinquency when reporting the account as past due.

9.If all Action Code fields are full, Action Code 194 will not be placed on the account. The account will appear on the Afterhours Exception Listing (FPSRP013) and the Credit Bureau Exception Report will show an error message for the loan ("ACTION CD 194 EXPECTED NOT FOUND/NORE REP"). Your institution will need to determine whether or not to delete action codes on the account so you can use Action Code 194 and the date of first delinquency.

When GOLDPoint Systems determines the Credit Bureau Account Status, the system examines the account looking first at the GOLDPoint Systems loan status (open, closed, released), then determines if it is past due or has hold codes.

The update function that initiates the Credit Bureau status and the date of first delinquency will process daily and update the loan status the business day just prior to a Due Date day or at monthend. Each night in the afterhours the accounts will be examined to see if delinquency will begin on the next business day. The severity of the delinquency will be identified and the appropriate status determined. This Credit Bureau Account Status is then adjusted based on the hold codes.

The system will also ensure that Action Code 194 (date of first occurrence) and the delinquent due date is used. Once Action Code 194 is present on an account, the date associated with that Action Code does not change. If the system analyzes the account and determines that the account should be reported as a current status, any Action Code 194 and date is deleted from the account. Action Code 94 and the associated date are not automatically examined by the system. Each institution is responsible to remove Action Code 94 and the date when needed.

Example: An account has a due date of 2-17. In March, during the afterhours of the business day just prior to the 19th (Due Date + 30 days) of the month, the updating process examines this account. GOLDPoint Systems determines that the account has a loan status of "open" and will be one month past due beginning the next business day. No hold codes are on the account, so the system updates the account with a Credit Bureau Account Status of "71" (account 30 days past due) and puts Action Code 194 with the date of 2-19 (Due Date + 30 days), because no Action Code 194 was present on the account previously. Then, at monthend, the status is re-verified to see if the account is in worse credit condition. If checks have bounced, etc. and the Due Date is further in the past, the Credit Bureau Account Status is modified. After this verification is done, during monthend processing, the Credit Reporting screen is updated with the new information. The transmission and reports will then be generated in April.