topic Re: KD's... in Rebuilding Your Credit

KD's...

IOBA — Wed, 11 Apr 2012 19:23:31 GMT

Who reports a KD?

Would that be the creditor/CA or the CB?

My friend has a "closed CA" account that showed nothing before. All of a sudden, even though it's "closed account" is reporting as a KD. To be honest, I forgot to check to see if it has a balance due or not. But they showed me that this is the first time the notation of KD is appearing and it's been reporting since 2009. The CR says it's a "closed account".

Thanks!

Re: KD's...

pizzadude — Wed, 11 Apr 2012 19:29:57 GMT

I think this is a term that is invented by the CRAs ~ creditors will just reported it as a deliquency, whether it is 30, 60, 90, etc...

Re: KD's...

IOBA — Wed, 11 Apr 2012 19:32:35 GMT

hhhmmm... If it's a CRA thing, then why put it on a "closed account".

And if it's a CA account, then is that allowed? CA's can't post delinquencies like that? They can't post 30, 90, etc lates.

edited to add - my friends credit score dropped almost 100 points on something that is from 2008 that was first reported in 2009 that is definitely a "closed" account.

Re: KD's...

pizzadude — Wed, 11 Apr 2012 19:53:06 GMT

What changed in the way it is reporting ? Did a new deliquency get added ?

I agree that deliquencies aren't applicable to collections ~ but there are many examples of CAs that have reported as accounts with deliquencies rather than as collections.

Re: KD's...

IOBA — Wed, 11 Apr 2012 20:22:30 GMT

The closed account had been reporting as "ND" (no data). Then it suddenly changed to "KD" (key degoratory). The FICO score plummeted by nearly 100 points.

On the CR it's under "closed accounts".

You think the CB decided to report is as a KD?

Can a CA report KD?

The account is ONLY reported by a CA. And it's at least 4 yrs old.

Re: KD's...

pizzadude — Wed, 11 Apr 2012 21:03:52 GMT

Is this a report pulled directly from one of the CRAs or from a CMS ? I don't see anything on my CRAs that refers to anything as a Key Deliquency. And I have plenty of late payments, although none are recent.

I'd recommend pulling a report directly from the CRA ~ it sounds like perhaps the CA is reporting this as a recent late payment.

Re: KD's...

RobertEG — Wed, 11 Apr 2012 21:55:44 GMT

"KD" is not a credit reporting code. It is an interpretation made by one producing your CR, akin to saying your file shows "negative accounts."

The collection is a key derog, simply by being a collection.

Debt collectors report the current status as either open (still under collection) or closed. The amount still under collection is reported as the collection balance.

A debt collector can initially report their collection, and then decide not to continue monthly reporting if nothing has changed. Thus, ND for months not reported.

Then they can provide a later update, with or without any changes. Maybe an update triggered the CRA to put a "KD" descriptor in later CRs, but that is not in and of itself a code reported by the debt collector. You are correct, debt collectors dont report monthly delinquencies, so that was not a trigger.

Why it would have triggered a drop in score puzzles me, as it was still the same collection derog before and after. Was the collection being recognized by FICO prior to the debt collector update? Maybe it was an item than FICO was not previously picking up, and the drop in score reflects the effect that it should have previously shown?

That part does puzzle me.....

Re: KD's...

IOBA — Thu, 12 Apr 2012 02:29:07 GMT

RobertEG - thank you for explaining. Question - why would a "closed" account update? If it's closed, it's closed.

In theory, a closed CA should not be updating, right? <----- I ask with a hopeful look on my face.

I think the score drop was because it was the first time as being coded as a KD, even though it is years old. I will have to see if I can see the reports again.

Re: KD's...

RobertEG — Thu, 12 Apr 2012 03:33:35 GMT

It depends upon what you call "updating."

Credtors routinely transmit an electronic version of their accounts to the CRAs, usually monthly. Often, they dont include any changes, but merely "update" as a statement that the prior information is the same. Most often, it includes a long string of data reporting everything on the account. It may not actually change anything.

They can continue to do that monthly, forever, if they are so inclined. However, once an account is closed and paid, they wont do that, as it is a waste of time and money.

They may screen their reporting so that only accounts with changed information are reported. So you may get sporadic reporting.

The issue is not whether they file an updated reporting, but rather whether their reporting includes any changes in data.