Collection Agency renamed and renewed paid collection

[Anonymous]

Hey, 

My husband got a notification on his credit report. When we checked it there was a "New" Collection listed on his report by Ascendium Education previously known as Great Lakes Higher Ed Corporation and Affiliates added two collection accounts that were paid last year. We paid both debts off last year. Great Lakes Higher Ed still has the original debt listed under their name as a closed, transfered account over 120+ days late. Great Lakes is still reporting what I think is one of the two original loans on my report as a collection account. I dont know what they did with the other one. Then last month they removed two Great Lakes accounts (leaving the one) and then reported the student loans under the new name which hit his credit as a "new debt" and "new late status" 

This is how they are listed on his report. The second one says the same thing just the balance is different. 

ASCENDIUM EDUCATION #*****   11100 USA PRKWY FISHERS, IN 46037 (800) 331-2314

Placed for collection: 07/15/2013

Responsibility: Individual Account

Account Type: Open Account

Loan Type: STUDENT LOAN

Balance: $0

Date Updated: 04/01/2018

Payment Received: $2,328

Last Payment Made: 03/07/2018

Original Amount: $2,094

Original Creditor: WAUKESHA STATE BANK (Educational)

Pay Status: >Account Paid in Full; was a Collection<

Date Closed: 03/07/2018

Date Paid: 03/07/2018

Remarks: >PAID COLLECTION<

Estimated month and year that this item will be removed: 06/2019

My question about the account listing is in red above. 

#1. Should this be listed as an "open" account when it is in fact closed? 

#2. Should I request an early exclusion since it drops off in June? We are going to be applying for a house in March and need these to poof before then if possible, especially since the new listing hit his credit hard dropping him 42 pts. 

What other advice might you have? 

Thank you so much!

[gdale6]

The balance is 0 so all will know its closed, updating that now would lead to a Fico score drop. You can try the EE with TU this early, the other 2 are not going to budge until at least 90 days prior. Can try a GW letter to the reporting creditor to see if they will remove it.

[Anonymous]

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@gdale6 wrote:

The balance is 0 so all will know its closed, updating that now would lead to a Fico score drop. You can try the EE with TU this early, the other 2 are not going to budge until at least 90 days prior. Can try a GW letter to the reporting creditor to see if they will remove it.

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Why exactly does an update cause the score to drop if the payment history is the same? I don’t understand this one. 

[gdale6]

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@Anonymous wrote:

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@gdale6 wrote:

The balance is 0 so all will know its closed, updating that now would lead to a Fico score drop. You can try the EE with TU this early, the other 2 are not going to budge until at least 90 days prior. Can try a GW letter to the reporting creditor to see if they will remove it.

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Why exactly does an update cause the score to drop if the payment history is the same? I don’t understand this one. 

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Fico looks to the status date (date of last update) to base its calculations. If it updates to todays date then in the eyes of Fico its a brand new collection even though it may have been paid years ago. I dont like it but it is the way it is.

[Anonymous]

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@gdale6 wrote:

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@Anonymous wrote:

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@gdale6 wrote:

The balance is 0 so all will know its closed, updating that now would lead to a Fico score drop. You can try the EE with TU this early, the other 2 are not going to budge until at least 90 days prior. Can try a GW letter to the reporting creditor to see if they will remove it.

---

Why exactly does an update cause the score to drop if the payment history is the same? I don’t understand this one. 

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Fico looks to the status date (date of last update) to base its calculations. If it updates to todays date then in the eyes of Fico its a brand new collection even though it may have been paid years ago. I dont like it but it is the way it is.

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Yeah that’s incredibly unfair but I guess the model IS created to favor creditors and not consumers at the end of the day. 

So if a collection account is put back on but it’s paid, you get hit with a paid collection drop plus the lates that you were already being hit with? That’s brutal...

[RobertEG]

Updated reporting only increases the reported period since initial delinquency if the reported status remains unpaid.

Scoring will then update the overall period of delinquency, similar to the reporting by a creditor of increase in delinquency from 60 late to 90 late.

However, once a debt is paid, any subsequent updated reporting by a debt collector does NOT further extend the reported period since initial delinquency, as it must report a current status of paid, $0 balance.

Debt collectors are instructed under the CRA credit reporting manual to cease regular monthly updates once a debt is paid, but if some item of information is later found to be inaccurate, they have a statutory requirment to promptly make updated reporting to correct the accuracy (FCRA 623(a)(2)), so it is possible for updated reporting to be proper after the collection is paid. 

However, the current status would be paid, so it would not extend the period of delinquency, and thus not negatively impact payment history scoring of the collection.

You are correct in your logical observation that updated reporting on a paid collection should not have negative payment history scoring impact.

[Anonymous]

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@RobertEG wrote:

Updated reporting only increases the reported period since initial delinquency if the reported status remains unpaid.

Scoring will then update the overall period of delinquency, similar to the reporting by a creditor of increase in delinquency from 60 late to 90 late.

However, once a debt is paid, any subsequent updated reporting by a debt collector does NOT further extend the reported period since initial delinquency, as it must report a current status of paid, $0 balance.

Debt collectors are instructed under the CRA credit reporting manual to cease regular monthly updates once a debt is paid, but if some item of information is later found to be inaccurate, they have a statutory requirment to promptly make updated reporting to correct the accuracy (FCRA 623(a)(2)), so it is possible for updated reporting to be proper after the collection is paid. 

However, the current status would be paid, so it would not extend the period of delinquency, and thus not negatively impact payment history scoring of the collection.

You are correct in your logical observation that updated reporting on a paid collection should not have negative payment history scoring impact.

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But what about when an item is removed and then put back on? Is the score penalty then the same as it was before it was removed? Such as in cases where record accuracy is in dispute and it gets deleted from the report because 30 days passes without a response but later gets updated and thus reappears? 

I have one such account on both EQ and EX that I simply disputed the claimed DOFD as it was a continuous delinquency from 3/2012 until I paid it 5/2014 but due to staggered reporting, it has a DOFD of 5/2014, the day it was paid. The loan servicer didn’t respond and thus it was removed this weekend from both of them. There was no change in my score because I have a paid charge off on my file but I don’t expect ACS to decide not to respond to the CRAs at some point despite the status being paid. 

[Anonymous]

Okay, so based on the posts I have concluded that the score drop was due to the agency name change causing FICO to think its a new ding even though its an old account. .... come to think about it.... the score drop probably was just a simulated drop since first the two other accounts were removed that were listed under the old creditor name so the score went up and then dropped back down after the creditor resubmitted the debt under the new company name... 

I think I will try EE for TU. I am getting MyFICO back next week since its time to regularily monitor our account since we are going to be applying for a mortgage in a few months. Dont want any more surprises. 

Thanks for all the help guys!

[Anonymous]

I'm not sure it was a simulated drop, because the same thing happened to me except I didn't take to out loans that are listed on the acct. But if it is, will our credit scores go back up? This company just started in December or November (I think). I'm realizing they hit a lot of people's reports on the 1st of the year. Lot of invalid dates, mine included. Looked at my CR and it says I took out student loans with in the past 3 years. My credit was too abysmal for me to do anything back then and I havent been in school in 5 years. I finally got it to 700 and then this happened. I dont know what kind of dispute letter to send to the CRAs. Also got a vague letter from the company this month saying 'we pulled your credit and if you think this is in error, please send us all you personal information.' The most sketchy letter I've ever seen. I almost dont want to send a validation letter to them because then they can confirm my address and try to harass me. I am lost and I've have been stressed out about this all week.  This is the first thread I've even seen mention anything about this anywhere. Can someone guide me into the right direction? I would truly and humbly appreciate it. If I need to make my own thread let me know and I will.

[Anonymous]

I was able to dispute the accounts with TU for an EE. They dropped off there. 

What company is claiming to own your student loans? Did you ever take out student loans? If so, did they get paid off? are they in deferrment? or are they still listed with the original loan office? 

My husbands loans were originally through Great Lakes Higher Education. They got sold to Navient when we consolidated them. So GL renamed to Ascendium Education according to a google search I did to find out where this account came from. 

I would not send a letter back to them with any personal information. 

If you never had any student loans or think the account is questionable I would send a letter to the CRA's or do an online dispute with those accounts and state that you were not in school when the accounts say you were and provide any proof of that. If you were in school previously and used FAFSA to help pay for it then getting a prinout from FAFSA with the last loan dispursement and/or any information from the college you attended as to when you graduated or left school would also be helpful. This at least offers some support of your claim that the account is inaccurate and invalid based on your records. 

Any info you have might help me help you. I am pretty well versed in the student loan junk as my husband and I both have/had student loans. 

ETA:  my husband did get a school boost after TU deleted the three accounts listed with his student loans. I think it was 43 points he went up but im not sure.  It was a notification through CK and their notification about credit changes are much higher than i expect FICO 8 would be.