I have somewhat recent experience with this. In the process of a mortgage application I was required to pay off an old collection from 02/06. I paid it in 08/10, they updated the account status as paid but put a KD (Key Derogatory) entry in for 08/10. My FICO reports pulled from this site showed a drop in score and the notation that I had a recent collection hurting my score (and the comments said the collection was one month old).
I don't know if the CA notated it wrong and it is due to fall off the reports in 02/13 so I am not willing to play with it anymore. It's effect has fallen into the background somewhat again. I know it is still dragging my score down as it only appears on 2 reports and there is a significant difference in score between the reports it is on and the one it isn't.
Starting Score: 500's
What Marine Vet said makes sense, but the issue I see is that what is being illustrated with both my example and the examples of others here happens more often than it doesn't. Maybe I am wrong there, but I'd say the way it should be is the exception, not the norm.
A question I have would be whether or not the improper affect that these DOLA updates have is covered by FCRA at all and, therefore, could be enforced.
