Epic Contributor
Posts: 25,651
Registered: ‎03-19-2007
Re: 120 late or paid collection - which is better?

First, current status of paid is a payment status, not a delinquency status.


As an account accrues delinquencies and derogs, each are reported and stored separately in your payment history profile.

Current status is updated whenever a new level of reported delinquency occurs.  Current status is a snapshot of, well, current account status.

It is a hybrid reporting code, which while an account is delinquent, records the current level of delinquency, such as 120-late, referred for collection, etc., and once paid, records the status of paid.  It then no longer reflects any delinquency status.


The level of delinquency prior to paid current status is retained in a separate code called your Payment Rating.  And all individual delinquencies are retained under your payment history profile. 


The current status of the account is correctly reflected in your TU report, which shows paid.  EX is still showing delinquency level, which the creditor should have updated when the debt was satisfied.  Good to correct, but it is reporting a $0 balance, so no biggie.  It is showing as satisfied.


As for which is worse, 120 lates and collections are both major derogs.  Whether FICO scores more for a collection than a serious monthly delinquency is kinda unclear, but the highest level is the one that hurts most.  Probably the collection.  Both are reported by different parties.  The potential significance of both reporting is that if you should, for example, obtain deletion of the collection, the 120-late will still be a scored major derog in your CR, and thus unless it is also deleted, the effect of deletion of the collection will have much less impact.


Get the account updated to a current status of paid, which is the accurate current status.  However, that does not affect the 120 or collection reporting issue.