Condition codes can be tricky when credit reporting. Changing a code when an investigation is complete is not always as simple as it sounds. In the latest episode of “Ask The Credit Reporting Expert,” Lauren Burnette of Messer Strickler walks through some of the variables that come into play when a furnisher is thinking about changing the condition code on an individual’s credit report.
Burnette notes that the “XC” condition code can “kill a lot of birds” with respect to complying with both the Fair Credit Reporting Act and the Fair Debt Collection Practices Act, but should only be used when a consumer disputes the results of an investigation that was conducted by the company furnishing the information to the credit reporting agencies.
Burnette also provides her perspective on “pay-for-delete” requests that are made by consumers seeking to have negative items removed from their credit report, and whether or not she thinks that furnishing information to the credit reporting agencies actually provides a lift in recovery rates.
“I think of credit reporting the same way I think of any other collection tool; I think you could pull the phrase ‘credit reporting’ out of the question that you just asked me, and replace it with ‘text messaging’ and and and it’s going to be the same question — ‘Is it worth it?’ ” Burnette said. “Anytime you add to your arsenal, you, by nature, expose yourself to additional legal avenues and additional risk. I’m not aware of anything public that can that can substantiate the anecdote that credit reporting increases collections, but I’ll say that the more tools you have, the more people you can reach. Someone that you can’t get on the phone may check their credit report or apply for a loan and find your tradeline and contact you for that reason.”
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