Moobs wrote:
Do we know what other issues they will be addressing besides the piggybacking of credit?
Like the issue of collections hurting the same if they are paid or unpaid? I believe that you would be less of a credit risk if you have paid your collections and thus should be rewarded for it by it not hurting as much.
I don't know specifically about the issue of whether a paid collection will hurt less than an unpaid collection, but I have read that FICO 08 will supposedly address the issue of being dinged when you pay an old collection, resulting in FICO treating it as a new collection due to an updated DOLA.
Personally, I understand the logic behind not treating paid collections any differently than unpaid ones. If you think about the purpose of the FICO model, and understand it is intended to be a predictive model to score people according to their risk to the lender, the fact that a collection was paid doesn't change the fact that the account still went to collections in the first place. From the OC's perspective, if they sell an "uncollectable" account to a CA or JDB, they don't really care that the account was paid after they sold it (since if the account was sold, the OC doesn't see any of that money that was paid after the fact anyway). All they care about was the fact that they had to send it to collections in the first place.
