Old Collections sold to another CA affect my Fico

[Starr79]

I have a collections that was sold from one collections agency to another and now my score watch says I have a recent collections that is affecting my score. I no longer have the recently been paying bills on time message, when in fact .Aside from old bills in collections..., I have not missed payments on active debt for years. Is this working properly? I thought when debt went to collections the first time you took a big hit, but I did not know every time they sell the debt it takes another big hit. If it shouldn't have, how do I get it to report properly? Thanks.

[RobertEG]

There are two issues.

1. Can a new debt collector report, even if a prior debt collector has reported; and

2. If so, how does FICO score the multiple collections on the same debt?

The answer to question 1 is yes.  Nothing prevents a new debt collector from reporting their collection, and a prior debt collector is not required to delete their reporting based on termination of their collection authority.  The old debt collector may choose to delete, but is required only to close their collection and report a $0 balance under collection.

As to question 2, I would hope that the FICO algorithm has the abiity to distinguish and score multiple collections on the same debt as a single collection, but many have posted that their scores drop upon a second reporting, so that appears to be anecdotal evidence that FICO does impose a penalty.

Hopefully, someone has a more conclusive answer.

[Starr79]

Thanks!