lates and collections..

[makeynik]

I have read a little about collections showing up as lates and I have two collections, that were never CC's but a bank account (overdrawn) and something else. Can they report late every month? So that it would show as past due amounts? and with 60, 90, 120, kd's, which they redo every so often? Kinda like really kicking someone when they are down?

[Anonymous]

I had a few collections that reported every single month as a late payment and at that time I could not figure out why MY FICO kept saying that I had a recent late payment when all my open credit cards were paid on time.  Everything else was closed and paid or closed and in collections.

They would keep that up until the account got sold to another agency, then I would have two of the same item reporting for a month or two until the first one dropped of.  Slightly different amounts with different dates but same account number. 

Since payment history is 35% of my score and I was getting knocked every month those accounts were the first I settled.  The were also knocking my "new credit" percentage every time it was sold and then re-reported.

[makeynik]

seems really unethical to me... : (

[Anonymous]

Well.....it's not really unethical.  I did create the debt. 

I also did not pay the debt back. 

It is their job to try to recover the bad debt for the OC, so every day that went by without return contact from me and every day that went by without a payment, was another day that I was late paying that debt since the first day it registered as late.  So again, they are technically right.

It took a while for my payment history to finally go from Bad to Not Good or Good but as soon as I settled those accounts, and then started to reduce my Revolving Credit Card Debt (open & collection accounts) my credit score finally began to recover.  My original Equifax Score was 497 in 2007.

Message Edited by shawtycat on 09-15-2008 09:30 PM

[makeynik]

well, shawty, I know what you are saying about responsibility, but, still, they are bending reporting protocol. That is what I think is not cool. I am repaying my debt, but when a Ca tells one to get a loan to repay, and yet here they are, intentionally bending reporting and are tearing apart one's score, keeping one from obtaining the loan that they are suggesting, it is not good.

[Anonymous]

That's just bad advice to get more debt to pay a debt. 

If you did get a loan, it will have to be a personal loan where you will have to put up assets (car etc.) as collateral and with your current credit score your interest rates may be somewhere in the 20-30% range.  In the end your loan may exceed your the actual amount of debt you owe at this time.

Before paying off any debts you should always secure your home, start setting aside your financial cusion (three months of monthly expenses),  then you work on bringing in more income.  Only after you have accomplished this can you, financially speaking, begin to think about repaying any debts.  If you have to think about taking out a loan to repay a debt then your finances are already on unsteady ground.

The Collection Agency you are speaking to at the moment that gave you such advice is only seeking to recover that debt and does not care if you lose everything in the process.  Leave the collection account alone until you are in a better financial situation.

[Anonymous]

Can someone weigh in on this? 

I thought the FCRA of 2003 said that as long as the creditor who gets your account notifies you of the delinquency and that they will be reporting negative information to the CRA if your account remains unpaid; they can report negative information to your credit report each month you do not pay.

I thought that is what it said in section 623(a)(5) and 623(a)(7).  I've also seen this stated in literature I received from several creditors in the past.

[Anonymous]

Yes - they can report the DQ every month -

Scoring wise- FICO sees "Collection" and ignores therest of the payment history.

It sees the Date (how recent) and How severe (CA)

You could have 30 120 lates on this TL and it would not change the score.

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shawtycat wrote:

Can someone weigh in on this? 

I thought the FCRA of 2003 said that as long as the creditor who gets your account notifies you of the delinquency and that they will be reporting negative information to the CRA if your account remains unpaid; they can report negative information to your credit report each month you do not pay.

I thought that is what it said in section 623(a)(5) and 623(a)(7).  I've also seen this stated in literature I received from several creditors in the past.

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[Anonymous]

They only need to notify you once-

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shawtycat wrote:

Can someone weigh in on this? 

I thought the FCRA of 2003 said that as long as the creditor who gets your account notifies you of the delinquency and that they will be reporting negative information to the CRA if your account remains unpaid; they can report negative information to your credit report each month you do not pay.

I thought that is what it said in section 623(a)(5) and 623(a)(7).  I've also seen this stated in literature I received from several creditors in the past.

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[Anonymous]

Okay, I had to go back to my credit reports to have a look. 

Under the Revolving heading of my TransUnion report it shows my Gap account and under Collections heading on my TransUnion report, it shows the collections agency who bought my Gap account. 

The Gap account under Revolving shows the account was transferred to another office with a Date Opened of 6/1/2004, while the collections agency reported that their account was opened on 10/2007.   Both accounts stayed on my credit report after dispute as "verified" and while the Original Creditor never reported after the account was sold, the collections agency reported a delinquency every single month.

Now, I know you said this should not hurt the FICO Score but it did hurt mine.  When I pulled a report here at My FICO it said that one of the factors hurting my score was a recent late payment.  It just so happened that I had no other late payments other than the collections accounts.  If the account was then resold to another collections agency, then it would show that I had a new account, a new late payment and a new collections account.

When I settled those accounts my score improved dramatically, the payment history section of my credit report at My FICO went from Bad to Not Good, it now says that my last late payment was months ago and the amount of new credit also went from Not Good to Good.

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Timothy wrote:

Yes - they can report the DQ every month -

Scoring wise- FICO sees "Collection" and ignores therest of the payment history.

It sees the Date (how recent) and How severe (CA)

You could have 30 120 lates on this TL and it would not change the score.