Suppose a debt has been assigned to a collection agency by an OC and that CA reports to the credit bureaus. After a discussion with the OC, the OC decides to accept payment for the account. Does the CA have any legal right to leave its mark on your credit reports even though that debt was settled with the OC? From my understanding, the CA is a third party and if the debt was settled with the OC, then that third party was not needed and shouldn't be listed on credit reports. Right? Sorry I searched through forums and couldn't find anything on this...
Starting Score: EX 568 | TU 569 | EQ 568
@chris6291 wrote:
Suppose a debt has been assigned to a collection agency by an OC and that CA reports to the credit bureaus. After a discussion with the OC, the OC decides to accept payment for the account. Does the CA have any legal right to leave its mark on your credit reports even though that debt was settled with the OC? From my understanding, the CA is a third party and if the debt was settled with the OC, then that third party was not needed and shouldn't be listed on credit reports. Right? Sorry I searched through forums and couldn't find anything on this...
Short answer is yes. As long as the CA has collection authority at the time you pay the OC they can report it as a paid collection and that is why when you negotiate with the OC that your payment to them is contingent on them recalling their collectors. When a CA loses the authority to collect per CRA rules they need to delete their entry.
