Question for the fico experts

[Anonymous]

How much would a newly reported collection hurt if the delinquent happened 5-6 years ago? To clarify, I let 6-7 accts go to charge offs status 5-6 years ago and Was wondering if a new collection agency bought an old account and barely reported it say a year ago, how would that affect my score? Out of 5-6 charge offs only 2 are in collections which are 2-3 years old now

[LS2982]

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@Anonymous wrote:
How much would a newly reported collection hurt if the delinquent happened 5-6 years ago? To clarify, I let 6-7 accts go to charge offs status 5-6 years ago and Was wondering if a new collection agency bought an old account and barely reported it say a year ago, how would that affect my score? Out of 5-6 charge offs only 2 are in collections which are 2-3 years old now

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A new collection on your report no matter how old it is, is going to hurt badly. I would focus on PFD'ing it if you cant get them to remove from a DV letter.

[RobertEG]

I wish there was some concrete information on how FICO scores collections, and for that matter, charge-offs, but unfortunately, it remains kinda a dark mystery, at least to me.

Take two consumers, both with the exact same credit history.  The OC charged-off or placed a debt for collection 5-6 years ago.

For consumer 1, the OC and debt collector immediately reported to the CRAs

For consumer 2, either one or  both delayed reporting that activity to the CRA until last month.

No real difference in the consumers' actions in not paying the delinquent debt, but a real difference in the age of the reported CO or collection.

Would the arbitray date of reporting date of the CO or collection represent a significant difference in the risk analysis of these two consumers?

Would collection 1, being significant newer, have a greater impact?  It doesnt seem logical to me.

Should not the impact of a collection or charge-off decay in its impact on scoring based on DOFD rather than the reporting date?

Maybe someone can shine some light under this basket....

[Anonymous]

Robert, I too would love to hear an opinion regarding this. Your statement is a lot clearer than mine, thanks!

[Student_Loans_Kill]

DOFD

[RobertEG]

DOFD what?

[Student_Loans_Kill]

DOFD from his first delinquency, being charged off does NOT affect that, meaning they will come off in 7.5 years from DoFD even if sold bougt and charged off. This date will NOT reset as to the OP's question, diminishing returns.

[RobertEG]

However, I dont think the CR exclusion date was the issue raised by the OP.

It was the effect of the date of reporting upon the FICO score while still included in scoring.

[Anonymous]

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@RobertEG wrote:

However, I dont think the CR exclusion date was the issue raised by the OP.

It was the effect of the date of reporting upon the FICO score while still included in scoring.

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+1

[Crashem]

Any new collection accounts will affect your credit score highly negatively.  In about a year and to two years, the affect will be diminished.  It doesn't seem to take into account how old the original account is.  But you aren't asking the right questions in my opinion.  Unless you are just paying attention to your score for fun, your real world credit goals are what matters.

Assuming you are over the time limit for them to collect the debt (decided state by state), your main concern right now is to find out when you had your last transaction on this debt (ie when you paid your last payment).  Once you find that out and have proof, make sure to keep it so they can not reage your debt.  From what you said, you should be fairly close to them falling off your credit report and any collection accounts as a result.

On the other hand, if you need to obtain credit before the 7 to 7.5 year falloff on these debts, then it might be worth talking to the collection agencies about paying some minimal amount in return for settling and removing the debt from the credit report.  It is important to understand a couple of things.  One, for this old debt, they probably paid max 10% for it.  Second, you need to get your proof together and facts around the issue straight and basically have a come to Jesus talk with them.  IE.  you can't collect this debt as it is over the time limit, it is going to fall off my credit report on XXX date, you guys paid like 2-5% for it, but you do want to meet your old obligations so you are willing to pay xxx.  Also, tell them if they refuse your offer, you will send them a certified letter telling them never to contact you again.  Worse case, they say no and you havent lost anything.