collections accounts timeline/effect on score

[compassion101]

For scoring purposes (not for falloffs), is a c/a aged by DOFD, or by the date the c/a reports the account?

For example, date of first delinquancy is 1/12, goes to collections by 6/12. Now take 2 people with identical credit reports (and they stay identical aside from the collection). Person A has the C/A filed on their report on 6/12, person B does not have anything reported to his CR. Obviously person A's score drops (hypothetically lets say 50 points) and B stays the same. Fast forward to a year later, lets say person A has rebounded 20 points due to aging of the C/A, so he is 30 points below B. However, now on 6/13 the C/A reports on person B's CR. Would person B receive a drop of 50 points, 30 points, or something other amount? Is his C/A automatically aged the same as person A since it has the same DOFD?

[RobertEG]

Excellent question....

And to throw a fly into the ointment, consider the fact that the statute governing the reporting of DOFD (FCRA 623(a)(5)) does not require its reporting until up to 90 days after the initial reporting of a charge-off or collection.

So one could very well have a reported collection or charge-off with no reported DOFD of record for up to three months after initial reporting.

[compassion101]

So I guess then any c/a reporting for the first time could be extremely bad even if it were old, at least till they put in the dofd. ''

I still wonder the effects after the initial hit, whether its based upon dofd or any other factors. Is there any other date they report, like date the c/a first got the account, or first reported the account?

[RobertEG]

When a debt collector first reports, they provide an "Open Date" for the collection, which is the date they received collection authority, either by assignment from the creditor or purchase of  the debt.

I had assumed, prior to posts by many on the site, that the DOFD would logically be the date upon which FICO would base the age of any collection or charge-off when calculating its age.  However, many post that the negative scoring effect of their collection increases when the debt collector reports an update.

That makes no sense to me, but apparently happens.

If FICO does indeed use DOFD for aging of collections or charge-offs, then it could, if no DOFD has yet been reported, use the Open Date for the collection as the presumed DOFD.  That might account for the updating when a new debt collector reports, but would not account for any later DOLA reported by the same debt collector.

Hopefully, someone has the answer.....

[RobertEG]

I guess a definitive answer to this thread remains a mystery, locked in the Fair Isaac vault?

[DaveSignal]

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@RobertEG wrote:

However, many post that the negative scoring effect of their collection increases when the debt collector reports an update.

That makes no sense to me, but apparently happens.

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I have experienced this exactly.  I think the collection is somehow scored by FICO in relation to the most recent month that it was updated by the CA.  Some people say paying collections does not help, and it definately doesn't help immediately, but I think it actually does help in the longrun because it often stops the CA from putting monthly derogatory updates in the payment history.

[MarineVietVet]

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@DaveSignal wrote:

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I have experienced this exactly.  I think the collection is somehow scored by FICO in relation to the most recent month that it was updated by the CA.  Some people say paying collections does not help, and it definately doesn't help immediately, but I think it actually does help in the longrun because it often stops the CA from putting monthly derogatory updates in the payment history.

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This doesn't apply to collections. 

Collections are scored off the Date of Assignment, not the DoLA or any other date. A change in DOLA (by making a payment or any other action) shouldn't affect the score. .

This is such a common belief that we're trying to find examples with before-and-after reports where it happened, in order to see what's going on. If either the CA or the CRA is handling the data incorrectly, it needs to be corrected.

Again, I'm not saying that it doesn't happen, but it's not supposed to, if the CA is reporting correctly and if the CRA is putting the info into the correct data fields.