What is the correct way to report the Date of First Delinquency (DOFD), and why is this date so important for compliance with the Fair Credit Reporting Act (FCRA)?
The Date of First Delinquency (DOFD) is a foundational element in credit reporting, directly impacting how long negative information remains on a consumer’s credit report. Accurate DOFD reporting is not only a best practice but a legal requirement under the FCRA. Failure to report this date correctly can result in compliance violations, consumer harm, and regulatory scrutiny.
Definition and Context
The DOFD is the date when a consumer first became 30 days delinquent on an account and never brought the account current before further negative action (such as charge-off, collection, or repossession). According to the FCRA (Section 623), this date determines the start of the seven-year period after which most negative information must be purged from consumer credit reports.
Metro 2® guidelines require the DOFD to be reported in Field 25 (“FCRA Compliance/Date of First Delinquency”) of the Base Segment. This field must be updated each reporting period based on the account’s status and payment history.
Step-by-Step Reporting Standards
1. Identify the Triggering Event
- For accounts with status codes indicating delinquency, collection, charge-off, or similar negative events (e.g., 61-65, 71, 78, 80, 82-84, 88-89, 93-97), the DOFD is the date of the first 30-day delinquency that led to the negative status.
- If the account becomes current and then goes delinquent again, the DOFD resets to the new first delinquency date.
2. Use the Correct Date Format
- Report the DOFD in MMDDYYYY format.
- Do not use future dates or leave the field blank if a delinquency exists.
3. Special Scenarios
- For accounts included in bankruptcy, report the bankruptcy petition date as the DOFD if the account is current at the time of filing.
- If the account is paid or settled, and no delinquency occurred, the DOFD should be zero-filled.
4. Update and Retain Records
- The DOFD must be substantiated by the furnisher’s records.
- If the account is disputed and corrected, update the DOFD accordingly.
Compliance Requirements
The FCRA mandates that furnishers notify consumer reporting agencies of the DOFD within 90 days of placing an account for collection, charge-off, or similar action. Accurate DOFD reporting ensures that negative information is not retained on consumer reports beyond the legally allowed period, protecting both consumers and furnishers from regulatory risk.
Impact on Consumers
Incorrect DOFD reporting can cause negative information to remain on a consumer’s credit report longer than permitted, unfairly impacting credit scores and access to credit. Conversely, accurate reporting supports fair treatment and compliance with consumer protection laws.
Conclusion
The Date of First Delinquency is a critical compliance field in credit reporting. By following FCRA and Metro 2® guidelines for DOFD reporting, data furnishers help ensure the accuracy, integrity, and fairness of the credit reporting system. Regular review of internal procedures and staff training are essential to maintain compliance and protect consumers.