Definition
The date of last activity (DOLA) for a credit account is either the date you last made a payment on an active account or on the charge-off date for a defaulted debt.
Analysis
The date of last activity is recorded on a credit report for each credit record. It is one of the most important items on a credit report for two reasons:
- The DOLA establishes the date from which the statute of limitations countdown begins. Legal action generally must be initiated before the statute of limitations expires.
- The DOLA dictates how long an item remains on a credit report. A positive account will remain for 10 years following the last payment. A negative reference will generally fall off 7 years after the final activity.
In some states, creditors are allowed to change the date of last activity if you simply acknowledge the debt. This can have devastating consequences for debtors. However, most states require that you make a payment to change the date of last activity.
Debt collectors occasionally may try to illegally change the date of last activity in order to retain the right to pursue a judgment. They may also do this in an attempt to make the account appear to be “fresher” to a debt buyer.
Another reason for doing so is to keep the account on a credit report for a longer period of time. This can force debtors to resolve the debt prior to making a large credit purchase such as a home mortgage.
In 2004, NCO Financial settled a lawsuit for a $1.5 million civil penalty after accusations by the Federal Trade Commission of unfair changes to the date of last activity on its debt accounts.
Some sources incorrectly suggest that the charge-off date is the date of last activity. However, the charge-off date tends to occur when the account is 6 months delinquent. The Fair Credit Reporting Act (FCRA) requires that any entity reporting a credit item must report the actual month and year that the account first went delinquent.
According to § 1681c of the FCRA, accounts must be removed which have been charged-off for 7 years or longer. Since charge-off requirements mandate that accounts be listed as bad debts following 180 days of delinquency, negative items can actually remain on your credit report for 7½ years.
It should be noted that the date of last activity is commonly updated by credit bureaus each time you make a payment on a delinquent account, even if the account is not restored to a current status. Once the debt is charged off, then the date of last activity may not change even if you do make additional payments.
Other items may remain on a credit report longer, such as bankruptcy. Unpaid tax liens may remain indefinitely, although they are typically removed after 15 years from the file date, which serves as the date of last activity.
