If a collection updates.

[J91605]

If acollection updates and my score drops, does it take another 24 months to stop impacting my score heavily?

[Anonymous]

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@J91605 wrote:

If acollection updates and my score drops, does it take another 24 months to stop impacting my score heavily?

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It is really difficult to say for certain. So much is really unkown about FICO's internal workings. I've heard many people say that the hit from an item updating wears off quickly if the item is older. I've heard it said many, many times that when an item updates it looks "new" to FICO, but I have my doubts about that. IMHO, that would be a very poor model, considering the amount of data it has to work with.. What makes far more sense to me (and this is simply a theory on my part) is that an item that updates is seen as increased collection activity - which of course puts a debtor at more risk of defaulting on other accounts. If thats the case, then it would naturally follow that no further updates would mean reduced collection pressure - less pressure on the debtor = less risk.

My feeling is that no, if its older than two years already, it should lose score impact quickly.

[J91605]

Sounds logical.

[RobertEG]

While many consumers contest, for reasons that remain a mystery to me, that old collections should count less and not be "updated" in scoring, the contrary argument is that the longer a debt remains delinquent, the longer the creditor's money is tied up in unrecovered interest, and thus older debts represent a greater risk to creditors who might lend to you.

I personally see logic in updated reporting that a collection is still open having effect on scoring, until it of course reaches credit report exclusion.

Regardless, as stated by Norman, the innards of the FICO algorithm are proprietary trade secrets, and thus we can only speculate....

[Anonymous]

I just had this happen with Chase and my score dropped 56 points! They updated Date of last activity from Aug 2011 to April 2012, not sure why. I am hoping that the drop is temporary, since it's an old account.