Capital One Collection Agency

[JennaD075]

I have had a Capital One credit card that was charged off a couple of years ago.  They just finally sent it to a collection agency a few months ago and I paid it off with a settlement they offered so I wouldn't have Capital One and the collection agency showing on my credit report.  Capital One still shows I owe the entire balance.  Will this stay until it falls off or do they have to update that it is paid off, even though I paid it to the collection agency and not them.

[RobertEG]

Once a debt is no longer owed to the OC, they are required under FCRA 623(a)(2) to promptly udpate their reporting to $0 balance.

Debt no longer owed to the OC can occur in three ways.

1.  The OC sells the debt to a debt colelctor.  That requires their immediate update of their reporting to $0

2.  You pay the OC.  They must promptly update.

3. You pay the debt collector.  They must notify the OC that the debt is satisfied, and both the debt collector and OC must update their reporting to $0.

Number 3 may take more time for the OC to update, as the fact of payment must filter back to them.

But ultimately the OC is required to update their reporting to $0 balance.

However, payment does not result in required deletion of derogs by the OC or the collection by the debt collector.

[JennaD075]

Thank you for your information.  I knew they wouldn't take away any derog's but I wanted to make sure the balance actually reflects that I paid.  Thank you..I will wait a couple more months before I contact anyone about my balance.

[abbafan]

From what I know directly from Capital One, they don't write off bad debts and don't report settled accounts as "settled". I've been told by a phone rep from Debt Recovery department that even if I settle an old account that I have with them they wouldn't update it as settled. 

[JennaD075]

If they won't show that I settled in full with their collection agency wouldn't they at least have to show that I paid a portion of the balance? Now I am really confused, since it was sent to a collection agency but I paid it off of the settlement amount the collection agency offered Capitol One doesn't need to show I paid anything? I paid the collection agency before they reported to the credit report.

[RobertEG]

If it is clear that your payment of the debt, regardless of the amount they agree to accept, discharges the debt, then both the debt collector and OC must promptly update their respective balances to $0.

The terms of how much they agreed to accept as satisfaction of the debt are not required to be reported.

Reporting that they accepted less than the full amount (i.e., "settled for less") is optional, and has nothing to do with the currrent debt balance now being $0.

It is a negative comment in that it informs others that they took a loss in their transactions with you.

If you settle for less and they agree not to report that fact, then your credit report will only show paid, $0 balance, and thus appear the same to those reading your CR as if it had been paid in full.