Question about closed collections

Anonymous · ‎10-27-2015

Does updating an collection on your credit report to "closed" hurt you? I had a collection that had been reporting as "open" and in "collections" while the debt had been paid off. I filed dispute on it and they changed the closed date to last month. Does that look bad? I know I didn't take a score hit, but will lenders look upon it negatively because it looks so recent? This account had been "paid and closed" two years ago. I was under the impression they would go back and put the original date that it should have been closed when it was paid off.

gdale6 · ‎10-27-2015

It could be a negative factor for some lenders. Fico looks at the status date so it looks like a new collection in its eyes, if you didnt get a score drop from the update you were lucky.

Anonymous · ‎10-27-2015

@gdale6 wrote:
It could be a negative factor for some lenders. Fico looks at the status date so it looks like a new collection in its eyes, if you didnt get a score drop from the update you were lucky.

So they don't update it to the actual closed date from the date it was paid?

RobertEG · ‎10-28-2015

A collection becomes closed upon satisfaction of the debt, so you are correct in that it should have been updated to closed promptly after the debt was paid.

They have now updated the status to closed, which is now the current status.

Current status is only a snapshot of status as of their last (current) reporting, and does not have any historical, prior meaning.

A prior current status is overwritten when a new current status is reported, and thus there is no update of the inaccuracy of prior reportings of current status.