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Why is it better to pay OC before it goes to CA?

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sharriel
Frequent Contributor

Why is it better to pay OC before it goes to CA?

I have seen this a few times on here and just wondering why.  Thanks!

5/16/13 Starting FICOEQ: 521 FICOTU: 536 FICOEX: 571
5/13/14 Current FICOEQ: 668 FICOTU: 690 FICOEX: 673
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CH-7-Mission-Accomplished
Valued Contributor

Re: Why is it better to pay OC before it goes to CA?


@sharriel wrote:

I have seen this a few times on here and just wondering why.  Thanks!


It can report twice on your reports and hit you twice as hard.  The OC's writeoff stays on your reports, and then the CA's entry.  For example, they could each show that you owe 5K for the same debt (if OC hasn't sold it).

 

Also, with things like cell phones, they do not report to CRA's, but if you go to collections, the CA will report.

Message 2 of 3
RobertEG
Legendary Contributor

Re: Why is it better to pay OC before it goes to CA?

If you pay the OC while the debt collector still has active collection authority, then the CRA reporting manual instructs the debt collector not to delete their reported collection.

That policy is intended by the CRAs to preserve the completeness of their credit reports, and thus value of their product.

It also extends both ot PFD offers and to GW requests after payment of the debt.

 

However, CRA policy instructs a debt collector to delete their reported collection if their collection authority is terminated with the debt remaining unpaid.

That policy is intended by the CRAs to prevent plurual collections from simultaneously by included in a consumer's credit report on the same debt.

 

If you pay the OC before it goes to a debt collector, then there is no basis for any collection by the debt collector, as there is no remaining debt upon which to conduct any collection activities.  Thus, any reported collection would be disputable as inaccurate based on their lack of legitimate collection authority.

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