Collections Time Frame?

[Anonymous]

Hey everyone,

I'm new here but have been a lurker for a while.  I'm looking at paying off several collections on both my husband's and my credit reports (so that we can hopefully buy a house in the near future), but I'm finding some inconsistent information regarding the time frame that the collections will remain on our reports.

For example, I have a collection that my report is stating should come off in July of 2018. If I were to pay the debt in full, would that restart the 7 years that it's included on my report?  Or would it be marked "paid in full" and still roll off in July of 2018?  In my research, I've found information that says it could go either way, so I'm wanting to know which is correct.

I hope my question somewhat makes sense.  Thanks in advance for your help.

[heavyjay]

Paying an account that was charged off by the original creditor does not change the Date of First Delinquency hence, in your example, it will still be excluded from your report in July 2018. Be aware however, if the CA or JDB updates it to Paid, it could tank your score depending on when it last updated.

[RobertEG]

The FCRA was amended two decades ago to specifiy that a collection must become excluded no later than 7 years plus 180 days from the DOFD on the OC account.  FCRA 605(c) 

No other date, such as date of the collection or of any payments, is relevant to credit report exclusion of a collection.

A debt collector is required to obtain and report the DOFD on the OC account no later than 90 days after reporting their collection.

While the maximum exclusion period is 7 years plus 180 days from that reported DOFD, the CRAs routinely estimate and exclude at approx 7 years from the DOFD.

Their estimated exclusion date thus normally includes an early exclusion of approx 6 months.

An estimated exclusion date of 07/2018 thus likely has a maximum exclusion date of no later than 01/2019.

[Anonymous]

Thanks for the information.  Is it correct to assume that, once it is updated and my score drops, the score will increase faster over time with it being paid rather than it being unpaid?

[heavyjay]

---

@Anonymous wrote:

Thanks for the information.  Is it correct to assume that, once it is updated and my score drops, the score will increase faster over time with it being paid rather than it being unpaid?

Paid collections are no better than unpaid ones unless it's a mortgage underwriter who is looking at it. Your score will rebound when it drops off in July.

ETA: I just realized it's July 2018, not this coming July. FWIW, I have a paid CO on EQ that's set to drop off in 2 months. My EQ is still 70+ points lower than my other 2 FICO scores.

[Anonymous]

Thanks for your help heavyjay it's much appreciated!