once an account gets sold??

[rootpooty]

if a collection agency is reporting a balance and they sell the account what happens? i have an account on exp that was sold and the balance and everything was changed to 0000. now my question is if a new agency buys it and they report it will both agencies be listed on my report for that one baddie?

[RobertEG]

Debt itself can only be listed by one creditor/debt collector in your CR. 

However, what you see in your CR can sometimes be deceiving, and lead one to believe that the same debt is erroneously being reported twice.

The simplist case is when an OC sells a debt.  They must then report a $0 balance on the OC account.

However, it is a bit more complicated when a debt collector is reporting.  When a debt collector reports a collection, what they are actually reporting is the amount of debt they are authorized to collect, which is irrespective of who owns the debt. 

When, for example, the OC still owns the debt and a debt collector reports, both can report the same balance at the same time.  The OC is reporting debt owed to them, and the debt collector is reporting debt they are authorized to collect. It looks like double-reporting, but is not.  What you refer to as two reportings related to the same debt.  Totally proper.

If a debt collector purchases a debt, that fact wont be apparent simply from looking at their collection reporting.  It will still show the same amount, but it now represents both debt they own and are collecting.  The OC reporting of a $0 balance triggers notice to the consumer that the debt collector now owns the debt.

Taking it a bit further, and getting to your situation, if debt collector 1 owns a debt and sells it to debt collector 2, then debt collector 1 neither owns the debt nor is still collecting on it, so they must close their collection account and report a $0 balance on the collection.  There is nothing then requiring that debt collector 1 delete their collection reporting, as it remains a fact that they did once have a legitimate collection on the debt.

New debt collector 2 can then, totally independent of debt collector 1, report the fact of their collection to the CRA.  In many instances, debt collector 1 will simply delete their prior collection, if for no other reason than to cease having to maintain that reporting or to be subject to any future FCRA dispute.  But nothing requires them to do so, as the reportings of both debt collectors is accurate.  So, yes, it is permissible for two debt collectors to have reported collections in your CR that relate to the same debt. 

Confusing?

[rootpooty]

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@RobertEG wrote:

Debt itself can only be listed by one creditor/debt collector in your CR. 

However, what you see in your CR can sometimes be deceiving, and lead one to believe that the same debt is erroneously being reported twice.

The simplist case is when an OC sells a debt.  They must then report a $0 balance on the OC account.

However, it is a bit more complicated when a debt collector is reporting.  When a debt collector reports a collection, what they are actually reporting is the amount of debt they are authorized to collect, which is irrespective of who owns the debt. 

When, for example, the OC still owns the debt and a debt collector reports, both can report the same balance at the same time.  The OC is reporting debt owed to them, and the debt collector is reporting debt they are authorized to collect. It looks like double-reporting, but is not.  What you refer to as two reportings related to the same debt.  Totally proper.

If a debt collector purchases a debt, that fact wont be apparent simply from looking at their collection reporting.  It will still show the same amount, but it now represents both debt they own and are collecting.  The OC reporting of a $0 balance triggers notice to the consumer that the debt collector now owns the debt.

Taking it a bit further, and getting to your situation, if debt collector 1 owns a debt and sells it to debt collector 2, then debt collector 1 neither owns the debt nor is still collecting on it, so they must close their collection account and report a $0 balance on the collection.  There is nothing then requiring that debt collector 1 delete their collection reporting, as it remains a fact that they did once have a legitimate collection on the debt.

New debt collector 2 can then, totally independent of debt collector 1, report the fact of their collection to the CRA.  In many instances, debt collector 1 will simply delete their prior collection, if for no other reason than to cease having to maintain that reporting or to be subject to any future FCRA dispute.  But nothing requires them to do so, as the reportings of both debt collectors is accurate.  So, yes, it is permissible for two debt collectors to have reported collections in your CR that relate to the same debt. 

Confusing?

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it makes sense what you stated. however for scoring purposes wouldnt that affect my fico score if 2 different agencies were reporting the same account?

[RobertEG]

One of the mysteries of the FICO scoring algorithm.  I agree that mutliple reportings by debt collectors on the same debt are actually equivalent, and should not be scored as separate collections.  I would hope that the scoring algorithm has some means to do that. However, I dont have any evidence to support that hope.

Maybe someone who has gone through the experience of multiple debt collections reporting on the same debt will post their experience on the results to their scoring....

[pizzadude]

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@RobertEG wrote:

One of the mysteries of the FICO scoring algorithm.  I agree that mutliple reportings by debt collectors on the same debt are actually equivalent, and should not be scored as separate collections.  I would hope that the scoring algorithm has some means to do that. However, I dont have any evidence to support that hope.

Maybe someone who has gone through the experience of multiple debt collections reporting on the same debt will post their experience on the results to their scoring....

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FICO scores each and every collection on your report, regardless of whether it represents a prior collection effort that has since been discontinued ( with a $0 balance ), or a new collection with a balance.   

A collection is a major derogatory and is never ignored by FICO, with the exception of FICO08 which I believe excludes collections under $100 from scoring.

[rootpooty]

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@pizzadude wrote:

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@RobertEG wrote:

One of the mysteries of the FICO scoring algorithm.  I agree that mutliple reportings by debt collectors on the same debt are actually equivalent, and should not be scored as separate collections.  I would hope that the scoring algorithm has some means to do that. However, I dont have any evidence to support that hope.

Maybe someone who has gone through the experience of multiple debt collections reporting on the same debt will post their experience on the results to their scoring....

---

FICO scores each and every collection on your report, regardless of whether it represents a prior collection effort that has since been discontinued ( with a $0 balance ), or a new collection with a balance.   

A collection is a major derogatory and is never ignored by FICO, with the exception of FICO08 which I believe excludes collections under $100 from scoring.

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so you mean to tell me that if 2 reporting agencies are reporting the same debt (one with a zero balance and one with a current balance) then im going to take a hit twice on my score?

[pizzadude]

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@rootpooty wrote:

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so you mean to tell me that if 2 reporting agencies are reporting the same debt (one with a zero balance and one with a current balance) then im going to take a hit twice on my score?

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Yes, that is correct.   With Charge~offs that turn into collections people usually get dinged at least twice, once for the OC account and once for a collection account.  

If another collection agency gets involved then that becomes a third FICO ding.

[RobertEG]

I am not sure I would accept that as gospel.  I have never seen anything posted by Fair Isaac that states that the presence of multiple reportings by different debt collectors, each reporting on the same OC debt, score the same as multiple collections relating to different debts.  As the OP has stated, that makes no sense. 

[pizzadude]

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@RobertEG wrote:

I am not sure I would accept that as gospel.  I have never seen anything posted by Fair Isaac that states that the presence of multiple reportings by different debt collectors, each reporting on the same OC debt, score the same as multiple collections relating to different debts.  As the OP has stated, that makes no sense. 

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I totally agree that it doesn't make sense.   But I would postulate that FICO probably isn't detailed enough to match collections back to the original creditor account.  Many times CAs report gobbledygook dates and accounts numbers, and I just don't see how FICO would know to match and/or exclude them.

[RobertEG]

Yeah, who knows....

However, one of the items of information required when reporting a collection to a CRA is the name of the creditor.  I dont see it as being that difficult to match a name, particularly since it has significant impact.

I wish Brother Fair Isaac would post a response!