If an account went to a collections agency, who sends info to the credit bureaus: the collections agency or the original organization? Each has told me that the other does it.
If the account is payed in full not long after the account was forwarded to collections, do they still report it? They have not reported it at the moment and it’s been about a month. Also, is it better to pay the original org or the collections agency?
They both will. The original creditor will list the account as a charge-off with a 0 balance. The collection agency will list the account with the amount due.
Usually the collection agency will send you out a letter asking you if the debt is yours. By default if you don’t dispute it in 30 days they consider it valid and will post the account on your credit report. If you pay it within the 30 days there is a good chance that they will not report it, but again it is best to have this in writting before you send a payment.
As to who you pay. If the account is charged-off and sold to the collection agency you legally can no longer deal with the original creditor and must deal with the collection agency. When you talk to the collection agency it is best to get them to delete the collection account with payment. However, be sure to have this in writting from them before you send any money.
December 8th, 2009 at 9:00 pm
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December 8th, 2009 at 9:35 pm
They both will. The original creditor will list the account as a charge-off with a 0 balance. The collection agency will list the account with the amount due.
Usually the collection agency will send you out a letter asking you if the debt is yours. By default if you don’t dispute it in 30 days they consider it valid and will post the account on your credit report. If you pay it within the 30 days there is a good chance that they will not report it, but again it is best to have this in writting before you send a payment.
As to who you pay. If the account is charged-off and sold to the collection agency you legally can no longer deal with the original creditor and must deal with the collection agency. When you talk to the collection agency it is best to get them to delete the collection account with payment. However, be sure to have this in writting from them before you send any money.
References :
December 8th, 2009 at 10:02 pm
Accounts are sent to the credit bureaus by their subscribers, banks, collection agencies, etc.
Public records are collected from the courts by independent contractors and reported to the credit bureaus.
If an account was paid in full before it shows up as credit bureau trade line it probably will not be reported. It costs subscribers money every time something is reported.
If the collection agency is hired by the original creditor, you have the right to deal with the original creditor only. It is better to pay them off because the collection agency would keep a portion of the payment.
If, however, the debt has been sold to a Junk Debt Buyer (JDB), the original creditor is no longer in the picture. Before you pay a JDB anything, make the verify that they truly own the debt and that they have the proper documentation to legally collect from you.
Also, JDBs buy old debt for pennies on the dollar. You can probably negotiate a settlement for a fraction of the original amount.
Before you pay a JDB anything, however, get a "Pay for Delete" agreement with them first. In other words, they must delete all their derogatory entries from the credit bureaus before they get a dime from you.
Hope this helps.
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