In my opinion, there are two answers to two different questions.
FCRA 605(c) is very clear as to how long a collection can continue to be included in a consumer credit report.
That is based on only one date-certain, which is the DOFD on the OC account. Period. You take that DOFD, first add 180 days to it, then the 7 year period of continued reporting under FCRA 605(a)(4), and the CA must drop from credit reporting at appox 7 1/2 years from the DOFD. No later dates reported by a CA can in any way reset the DOFD reported by the OC, and thus extends its inclusion in the consumer CR. That was the entire purpose of FCRA 605(c).
Once that date has expired, then question 2 becomes moot, since it can then no longer be in the CR for any FICO scoring consideratiion.
If question 2 is then what effect a DOLA reported by a CA has on credit scoring prior to its statuory CR deletion date, that is a separate issue.
Quite simply, no one can answer this question for you other than Fair Isaac. Credit scoring algorithms developed by anyone, including Fair Isaac, are proprietary trade secrets, and thus not subject to regulation under the FCRA. Some anecdotal posts on this site seem to indicate that the FICO scoring algorithms may, if a CA reports a DOLA on their collection activities, increase their negative impact in the FICO scoring algorithms. Maybe so. But it is not something subject to consumer ability to dispute.
All that is certain is that, 7 years plus 180-days from the date-certain DOFD on the OC account, it must be removed from a consumer CR, and thus from credit scoring by FICO. After that time, question 2, which is only a credit scoring impact issue while still in your CR, becomes moot.
Robert, I really only posted looking for an answer to what you're calling question 2. As we've established, it is not a moot point because the account has not been removed yet. Since the estimated time of removal doesn't coincide properly with our records of DOFD, it is something I will likely continue to argue with the CRA - especially come 2011 when it should definitely be removed even given an extra 180 days. I'd therefore like to know if other's have had issues with an Equifax score dropping because of the Date Reported being updated to the current month. While I realize FICO algorithms are a trade secret, that isn't to say that the myFico community isn't perfectly capable of answering that yes, recent negatives affect your score more than older negatives, or that 1% seems to be the ideal util, even better than 0%, for example. The algorithms are secret, and exact results impossible for the layperson to calculate, but I don't think it's ridiculous for me to ask if the community has any experience with Date Reported affecting scores.
Hi, Mank, here's how it's supposed to be: it's calculated off the date of assignment, not the DOLA, so any updating of DOLA shouldn't affect the score.
We keep reading that people say their scores were affected, and we're trying to find documented examples. Scoring comes from a formula. It's just a blind equation looking for numbers to plug in. The equation looks at the date that the collection was assigned, not at the DOLA, so changes in the DOLA should be irrelevant. Now what might happen is that consumers get an alert about changes on their reports, and think that something happened to their scores, when in fact it was more of a heads-up alert.
I'm certainly not saying that score changes might not happen, but they're not supposed to. If someone's score definitely changes because of an updated DOLA, and there was nothing else going on with their reports that might have been the real trigger, then something is being coded or reported wrong and needs to be fixed.
That's why we've been trying to get examples of this happening, examples that have screenshots of the before-and-after reports and FICO scores. If CA's are reporting incorrectly, or if the CRA's are putting dates into wrong fields, FICO needs to know about it so that it can be fixed.
Here's where I waded into the issue (scared witless, I might add): Settle or Pay in Full
HUTS -- thank you! Very interesting and helpful info!
Mank, I totally agree with you!
Forgive me if I gave any implication that your question was rediculous or moot. It is an excellent question!!!!!
As HTSU said so well, these are gray areas. All we can really go on are anecdotal experiences, for the FCRA does not specifically regulate credit scoring algorithms.
I agree that there is nothing moot about something that still appears in your CR. My only point was that once the 7 1/2 period expires, based only on DOFD, then the question of effect on CA updates to credit reporting, thereafter, becomes moot. Sorry for the confusion.
From the excellent information posted by HTSU, it appears that the controlling date for credit scoring impact is the date that the OC either placed/assigned the debt to a debt collector (or the debt collector purchased the debt), and not a later date when the debt collector actually posted the collection to a CRA? The OC reports their date of collection referral to the CRA under a status update in the OC account. It may be months, or even years, after an OC refers a debt/account for collection, and when the debt collector then "opens" a collection account with the CRA by reporting to a CRA.
In reading the definition of the reporting codes as set forth in the CRA reporting manual, for debt collectors when establishing a CA with the CRA, it says exactly what HTSU said. The date opened for a collection account is the "date the account was placed/assigned to the third party debt collection agency or purchased by the debt purchaser."
I will speculate that many debt collectors, when reporting the "date opened" for a collection, dont report the date of OC assignment to them, but rather report the "date opened" as the date of their posting to the CRA. If FICO uses that date for assessing the impact of the collection on credit scoring, then it could lead to FICO scoring of increased impact on the recency of the collection. So it may be an issue of inaccurate debt collector reporting of "date opened" when reporting a CA,
I see your point.
I recently had my credit score drop about 50 point in one month, from 691-639 tu. 2 things happened in that month 1) I went from 10% utilization to 0 zero % utilization and my credit was pulled by 2 mortgage lenders. 2) I noticed that an account which was closed in a bankruptcy 4yrs ago was reported 2 in this same month. What could have caused my drop, an how soon will I get it back up