Can they do this?

[sooneracct]

I have a private SL that went to collections in 2003. Since that time I have been making regular payments faithfully every month to the collection agency. On my credit report it is being reported as 120+ days late when in fact it is being made monthly through direct debt. I called the University and they said it would remain past due until paid off. They are reporting to the credit agencies monthly, but showing I was late. Can they do this?

The last date of activity is 6/2003 and it is set to fall off my report this year. Would it do more harm to my score to pay it off now? I am trying to buy a house and I cant take that FICO score hit.

[Jazzzy]

Hi...and welcome.

I would urge you to ask this question on the Rebuilding Your Credit forum. There are a lot more readers there than on the Student Loans forum, and I realize your question is time-sensitive.

They will ask you exactly how this is reporting...as well as your date of first delinquency (DOFD). I wish I could advise...but I am out of my league with this question.

[cdtotten]

Quite frankly, I think you may actually be lucky. Usually when you make payments on a collection account (and theoretically bring it current) it removes the dofd and those just become past delinquencies... thus keeping it on your report for another 7 yrs. If it is truly set to fall off and you are making payments, i would leave it alone.

[LisaPA]

I think you  mean that even though you are current now that your report is still showing that you were late in 2003. That is correct and it will not come off your report no matter what your current payment status is. If the late is going to fall off this year, your scores should come up at that point.

As for paying it off, I have heard that some people have taken a small score hit when they went to 0 balance on installment loans, but your score would recover in a few months (depends on what else is on your report). I think if you can afford it you'd be better off killing that debt before looking for a house.

[laz98]

ditto to lisapa

[sooneracct]

I am current and they show I am still +120 days past due every month. For example I have paid for Jan 2009- but my report shows in Jan 2009 I am +120 past due. They have done this every month. Even the month that I have paid (which has been every month since 2003). They never corrected that I am up to date going further. Jan 2010 shows +120 days late when the Jan 2010 payment was paid January 25th.

[laz98]

ok, i hope i word this correctly, so i don't confuse anyone...

when you started paying on your loan again, did you start making the payments that you would normally have been paying, as in you paid january, february, & march, but skipped april, may, & june, & then in july, make july's payment as you normally would?  or did you pay back all the money from the months that you didn't pay, & then continue making your regular payments?  if you never made up those missed months, that's probably why they are reporting that way, because you technically still owe them for the hypothetical apri, may, & june in my example.

[sooneracct]

I did not go back and pay, however the orginal payment was 123 a month but since I have started making payments it has been 150 a month. I would have thought these months would have caught up by now. Their answer to my question was "once it goes in collections we dont report the payment until it is paid off". I have been making payments for years.

[MarineVietVet]

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@cdtotten wrote:
Quite frankly, I think you may actually be lucky. Usually when you make payments on a collection account (and theoretically bring it current) it removes the dofd and those just become past delinquencies... thus keeping it on your report for another 7 yrs. If it is truly set to fall off and you are making payments, i would leave it alone.

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Nothing can change the DOFD concerning a CO or collection.

Here is how and when derogs drop from you CR, and are thus no longer included in FICO scoring.

Monthly delinquencies under an OC account drop at 7 years from their individual date of delinquency. FCRA 605(a)(5). The date of first delinquency (DOFD) has nothing to do with these drop-off dates. They drop from their own individual dates. So look at each prior OC reported monthly derog date, and simply add 7 years.

If the OC subsequently reports their account as a charge off, that is a totally different and additional post to your CR. Their post as a charge-off will remain in your CR for 7 1/2 years from the DOFD on the OC account, which is the first 30-day delinquency you had on the account, and disregards any later 60/90+ delinquencies that followed. That is one single date-certain, and cannot be reset. FCRA 605(c).

If the OC then refers the account for collection, and a CA posts to your CR, the drop-off date of their collection reporting is the same as that of a CO. It is 7 1/2 years from the same DOFD on the OC account, and the CA cannot reset this date. Again, FCRA 605(c).

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work


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[laz98]

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@sooneracct wrote:
I did not go back and pay, however the orginal payment was 123 a month but since I have started making payments it has been 150 a month. I would have thought these months would have caught up by now. Their answer to my question was "once it goes in collections we dont report the payment until it is paid off". I have been making payments for years.

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if i were you, i would take a close look at my records & do the math yourself.  with interest & penalties, who knows how long it may have taken to get you caught up.