Collections and credit reports

One debt should never show twice

If the original creditor still reports a charge-off and a collector reports the same debt, both may legitimately appear, but two collectors reporting the same debt should not. Duplicate collections are one of the most common findings in a three-bureau audit.

Debt validation is your right

Within 30 days of a collector's first written contact, you may request validation of the debt in writing. The collector must stop collection activity until it provides verification. Many purchased debts arrive with incomplete documentation, and an item the collector cannot verify cannot remain on your report.

Paying does not automatically remove it

A paid collection still reports for the full period in most cases; the status simply changes to paid. Newer scoring models (FICO 9, FICO 10, VantageScore 3.0 and 4.0) ignore paid collections, but many mortgage lenders still use older models that do not.

That is why the sequence matters: verify the debt is yours and accurately reported before you pay anything, and get any agreement in writing first.

Medical collections are treated differently

• Paid medical collections are no longer reported by the nationwide agencies
• Unpaid medical collections under $500 are no longer reported
• There is a waiting period before an unpaid medical bill can appear at all
• Billing and insurance coding errors make these among the most disputable items

Know your protections

Federal law limits when and how a collector may contact you, prohibits harassment and false statements, and requires them to report a debt as disputed when you dispute it. You can also require that they stop contacting you in writing.