Options for DOLA

[vegas757]

I paid an in-house Verizon collection of $386 in April 2011. Over the course of the next 10 months (February 2012), my 3 credit reports all listed the account as not being paid. I called Verizon sereral times over this time period and was told they updated the credit bureaus numerous times but would again do so. When I called in February 2012, I spoke with a manager who told me he saw what the problem was (but would not tell me) and that this time it would be taken care of. In March 2012, all 3 credit bureaus finally listed the account as paid. However, the "date of last activity" was now listed as March 2012 instead of April/May 2011 when it should have been updated. I have read forums where if you pay a collection off, and the DOLA changes to a more current date, your score takes a hit. I've also read where it doesn't. Does anyone know the true answer to this??? If so, does anyone know if I have any options now since I never officially disputed it? Is it possible to even dispute a DOLA? If so, wouldn't the DOLA be even newer after the investigation? I'm just hoping to have the DOLA be reported as almost a year older than what it is. Thanks in advance.

[cdtotten]

This has been disproven over time on the board. I used to think the same thing.

No reason to dispute the date of last activity - meaningless in the grand scheme of things. As I'm sure you know, paying off a collection has no effect on your FICO score. Unpaid and paid collections are scored exactly the same. It does help in manual underwriting though.

[RobertEG]

+1

DOLA has no specific definition.  The last activity on an account or collection could be a number of entirely different things, some of significance, and others of no significance.

Scoring of derogs is based on the adverse date of the derog, not some inconsequential reporting of unrelated updates.  For a collection, the effective date of the derog impact and its ultimate CR exclusion date is based on the DOFD.

The significance of a DOLA might be upon a manual review of your CR.  If a DOLA is reported, anyone being interested would look to what that DOLA was, not to the general statement that there was some recently reported information.  It might or might not be important to them.

Its always possible to dispute any inaccuracy, but if a party reported some activity, and that activity was accurate, a dispute is not appropriate.

It will most likely just be verified, and the dispute concluded.  ONe of the problems with spurious disputes is that they result in a dispute flag being posted to your CR, which removes certain account items from scoring until the flag is removed.  That is the harm. 

Just check to be sure that the dispute flag is promptly lifted when the dispute is concluded, returning your scoring to normal.

[bettercreditguy1]

Paid collections look better to financial entities and cc companies when aproaching or requesting a loan or cli even if they remain on your report.

[vegas757]

Thanks for all of your answers. I've had a mortgage broker tell me to not pay any collections until the day of closing due to paying it just before will make the DOLA more current, thus lowering your score. Also read forums on mortgage sites that say this. So is something that used to be the case and it no longer factors into scoring?

[vegas757]

Sorry to post again about this. To make it short and simple...Does paying a collection account off and having the DoLA updated decrease your Fico score? I have read replies to my personal posts, other related Fico forum posts, and other related forums on the internet. And it seems there is no consistent answer. It's yes it will because the scoring system will look at the account as newer (DoLA) eventhough paid, and no it won't because the DoLA for collections has no impact on the Fico algorythm. I spoke with morgtage brokers who have customers pay off collection(s) at/near closing due to paying off an old collection will only update the DoLA and hurt your score. Can someone with concrete knowledge answer this? Maybe the inventor of this scoring system calculator? Thanks

OP, to avoid two different threads on the exact same topic, your other thread was merged into this one. - llecs, myFICO moderator

[bettercreditguy1]

The hit to your Fico or credit score occurs when the infraction is booked. That is The date of First delinquency, not the last date of reporting. As you are applying for a mortage or loan, it would have been better to pay the past due accounts earlier in the process. However, most lenders will want these items paid before closing. It makes for less problems just in case one of your past creditors would re-enter the picture and request or demand payment as you are  now seen as having some assets or availability of monetary funds.

[rckstrscott]

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@vegas757 wrote:

Sorry to post again about this. To make it short and simple...Does paying a collection account off and having the DoLA updated decrease your Fico score? I have read replies to my personal posts, other related Fico forum posts, and other related forums on the internet. And it seems there is no consistent answer. It's yes it will because the scoring system will look at the account as newer (DoLA) eventhough paid, and no it won't because the DoLA for collections has no impact on the Fico algorythm. I spoke with morgtage brokers who have customers pay off collection(s) at/near closing due to paying off an old collection will only update the DoLA and hurt your score. Can someone with concrete knowledge answer this? Maybe the inventor of this scoring system calculator? Thanks

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As responded to in your other thread by other users, and in dozens of other threads, the DOLA has no effect on FICO score when factoring collection accounts. I don't even think this is even debatable at this stage, its pretty much common knowledge.

Your mortgage broker is wrong about the scoring; likely because they don't really know exactly how the FICO scoring model works.

Banks (meaning the underwriters) sometimes have issues with DOLA, because they see it as movement on an account, same as they have issues with accounts with 'dispute' remarks even if accounts are not in dispute. They simply don't know how it works, so they err on the side of caution.

If you trust what your broker is saying, by all means. My LO told me not to pay off a collection unless the underwriter asks for it (I only have one), and he mentioned DOLA possibly impacting score, but I know that is wrong. But I didn't pay it off yet, because its their bank, and their undewriter. My goal is to get a house. If I have to jump through hoops that don't really exist, but the banks think they do, then I have to do it.

-scott

[vegas757]

Ok thanks. Does this apply the same for the bureaus when a mortgage lender pulls your 3 scores? The reason I asked is because last year I paid my only collection knowing that I would be applying for a home loan this summer. However, the company nvr updated the bureaus until last month that it was paid. Now the dola is recent. But since it won't hurt me, I guess I'm good. Again, thanks for everyone's help.

[llecs]

OP, the term "collection" is used loosely out there, but in FICO-speak, it makes a big difference. For a collection agency (CA), an updated DOLA does nothing to your FICO. That's why, in part, that paying a collection will never help or hurt your FICO.

The other type of collection is a charge-off (CO). In forum-speak, your Verizon account wasn't a collection but a CO. Paying a CO can impact your score due to the update of the TL and impact of the balance and util (not applicable to Verizon).

First off, FICO scores on the worst delinquency of a baddie. In the case of Verizon, the worst delinquency is the CO itself. Paying a CO won't make the charge-off any less of a charge-off. So, paying a CO won't impact the most important item being scored. Like with CAs, paying a CO won't impact your FICO.

However....in some cases, if you have a TL that had not updated in a very long time, and you pay it, it will update. FICO will score off that update and in some cases, if that tL hadn't updated in a very long time, paying it can result in a score drop. It's not that common but it can happen. FICO does look at the DOLA, but it'll also look at the date reported. How FICO views this update varies across FICO formulas. IIRC, EX and EQ doesn't care, but you can see a negative impact on TU FICO (TU98) if the TL hadn't updated in a long time. And I don't know how the newer FICO versions view all of this. It seems like Barry posted in here once talking about it, or maybe I PM'd him. I can't remember.

I wouldn't worry about it though. Whenever you pay, dispute, or the OC makes any changes to a TL, the DOLA and status or reported dates will update. They have to. It's unavoidable, otherwise the alternative would be to leave a balance reporting and I assume it had to be paid as a condition to close. It's not disputable. In fact, the DOLA will update again if you dispute, plus, knowing Verizon, they'll add additional lates. Also know that their addition of lates when you pay is standard practice. I too had the same happen to me when we closed on a home. They added a 120-day late in the month we paid it. FICO did not change, but the TL was also recent.

ETA...I'd GW them.