If a bill gets sent to a collection agency, does that immediately effect my credit score?
Yeah, that’s pretty much it - does the fact that the collection agency has the debt effect my score, or does that only happen if they report it to the credit agencies?
Thanks for any help and advice!
It really depends on what type of debt it is, let’s say it’s something small like a doctor’s bill that has been turned over to a collection agency. At the point its turned over, no it doesn’t affect your score right away and you still have a chance to keep it from being reported on your credit.
But, if its something like a car note or something that was financed the original creditor would have reported the lateness to the credit bureaus before they actually closed the account and turned it over to the credit agency resulting in late payments to show up from the original creditor and then the collections entry to your credit report, now you have a double whammy situation.
Try to work with the collections agency before they report to the bureau.
January 26th, 2010 at 6:11 am
It may take a month or two to show up but it will.
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January 26th, 2010 at 6:47 am
Credit score is based on what is reported.
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January 26th, 2010 at 6:53 am
Your Credit already damaged long before the bill sent to collection agency. The original lender may had tried to collect from you for at least 3 months. Now you could corrected the situation by settle with the collection agency in WRITING. You could pay the amount or settle for less. And try to stay on the right track from now on
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January 26th, 2010 at 7:01 am
yes within a couple months
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January 26th, 2010 at 7:20 am
It only affects your score if someone reports it to the credit reporting agnecies (credit bureaus).
However, in most cases, the fact that you did not pay you the bill in time is reported and hurts your score, even before the bill is sent to a collection agency. For example, unpaid credit card bills usually hurt your credit after just one month, even though they are usually not sent to a collection agency for three months.
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January 26th, 2010 at 7:56 am
Once a account goes to an 3rd party debt collector, then it will take the account being reported in order to effect your credit. This situation applies to bills that are normally not reported like medical bills, utilities, rents, etc.
If the account that sold/turned over your account to a collection agency was for credit cards, secured loan, installment loans, student loans, etc, then your credit has already been effected. These types of loans are reported to the credit bureaus monthly. So if you have missed enough payments for it to be turned over, your credit has already been damaged by late payments.
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January 26th, 2010 at 8:32 am
Usually when the original creditor sends your account to a collector, they have already reported it to the Credit Bureaus. Some businesses, however, do not have accounts with the CRA’s and therefore can not report but most collection agencies do have accounts and will report. Generally, they will send you a letter requesting payment. They give you 30 days to dispute the account or ask for validation. If you don’t respond for 30 days they will continue efforts and then report to the CRA. You can call them and simply ask if they’ve reported but generally they aren’t very honest.
If you can settle it, you can call them and ask them if they have reported. If they have not, try to work out a payment schedule and request they not report it while you are making payments but if you do this, get the agreement in writing and on letterhead.
Finally, if the debt is old and has just been sent to a collection agency you need to see yoru states statutes of limitations to even see if the debt is legally collectible.
You can read more about it here and check your states statutes here:
http://creditrepairinfoservices.com/blog/does-paying-charged-off-accounts-help-my-credit-score
http://www.comebackcredit.com/statute-of-limitations-on-debts/
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http://creditrepairinfoservices.com/blog/does-paying-charged-off-accounts-help-my-credit-score
http://www.comebackcredit.com/statute-of-limitations-on-debts/
January 26th, 2010 at 9:09 am
It really depends on what type of debt it is, let’s say it’s something small like a doctor’s bill that has been turned over to a collection agency. At the point its turned over, no it doesn’t affect your score right away and you still have a chance to keep it from being reported on your credit.
But, if its something like a car note or something that was financed the original creditor would have reported the lateness to the credit bureaus before they actually closed the account and turned it over to the credit agency resulting in late payments to show up from the original creditor and then the collections entry to your credit report, now you have a double whammy situation.
Try to work with the collections agency before they report to the bureau.
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Personal experience
January 26th, 2010 at 9:50 am
You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments - buildcredit.ifastnet.com
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