@rebuilder33 wrote:I have a question regarding how collection accounts affect credit scores.
If a person has a credit card that is charged off with a charged off status I understand their score takes a hit for that charge off (as well as it reporting late).
If the OC sells that account to a collection agency a year or so later. When the collection agency then reports the same debt does that second entry also affect your credit score?
I guess to summarize are you penalized twice for the same debt score wise as it is reported twice?
As I understand it, it's seperate.
The status line isn't really factored into the score as I understand it, but the payment history is: so the lates on the OC tradeline absolutely count. When it goes to collection, there's the seperate line entry for the collection account and it goes into a seperate part of the scorecard and is calculated seperately. I don't think it's double-dipping on the charge-off as a result.
@rebuilder33 wrote:Absolutely I understand the lates would affect the score.
Just so I make sure I understand. Obviously there would be a score drop when the OC charges off the account (lets say from 620 - 580), but you DO NOT believe there would be a secondary drop lets say (580-540) when the collection account is reported for that charge off?
You lose points for the delinquent Charge-Off account -and- you lose points for the collection. They are treated as seperate accounts.
EX:694 TU:744 EQ:777
@DaveSignal wrote:
@rebuilder33 wrote:Absolutely I understand the lates would affect the score.
Just so I make sure I understand. Obviously there would be a score drop when the OC charges off the account (lets say from 620 - 580), but you DO NOT believe there would be a secondary drop lets say (580-540) when the collection account is reported for that charge off?
You lose points for the delinquent Charge-Off account -and- you lose points for the collection. They are treated as seperate accounts.
This; I re-read what I originally posted and I wasn't clear. The payment history leading to the charge-off and the collection are seperate and both affect the resultant score.