Credit Report Updates and Collection

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READER QUESTION

I recently paid off a collection and I am waiting for my credit score to change how often does it change?

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Bills.com Resident Expert
Dec 12, 2011
BILL'S ANSWER

Most credit bureaus update their files every 90 days, or approximately quarterly. This does not necessarily mean that what you are seeking will show up in the next reporting cycle, as there are frequent delays in reporting.

Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. This law is known as the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer's credit report for 7.5 years. The clock starts approximately 180 days after the date of first delinquency on the account. To learn when an account will be removed by the credit reporting agencies (TransUnion, Equifax, and Experian and others), add 7.5 years to the date of first delinquency. Subsequent activity, such as resolving the debt, is irrelevant to the seven-year rule. However, if the debt is a tax lien, that can appear for seven years from the date of payment. A bankruptcy will appear for ten years from the date of the final order. Delinquent federal student loans can be reported indefinitely, i.e., for as long as they are delinquent.

Under the FCRA, all trade lines can be reported on each of the credit bureaus. However, the reporting agencies must update and keep accurate data in their credit files. If there is erroneous information, you must notify them (typically through a certified letter) and then wait one reporting cycle (90 days) for the errors to be removed.

There are three major credit bureaus that offer credit reports, if there is something that you want added or removed, you should contact them directly:

EquifaxExperianTransUnion
800-685-1111888-397-3742800-916-8800
Equifax.comExperian.comTransUnion.com
File a credit dispute online at EquifaxFile a credit dispute online at ExperianFile a credit dispute online at TransUnion

To get a hold of your credit report, contact one of these three bureaus or AnnualCreditReport.com. Each credit reporting agency interprets your credit information differently, so you might want to get a report from all three.

Since you are asking about credit updates, you might also be interested in how your credit score is calculated. Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history. Paying off delinquent or maxed out trade-lines will almost always help your credit score.

If you would like more information, please visit our credit resource page at Bills.com.

We hope that this helped you to Find. Learn. and Save.

Best,

Bill

www.bills.com

Comments (23)


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John B.
Genesee, NY  |  September 08, 2011
I have 13 negative claims against my credit for a total of approximately $7,000.00. ( my score is around 600) Most claims are over 6+ yrs old, different types of medical bills etc, none of which are delinquent credit cards/ loans. I can finally pay on these and start to take care of them. At what point should I hopefully be able to not need co-singers for loans/ be able to take out a mortgage on a home. THANKS!
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Bills.com
September 08, 2011
Your accounts will fall off of your credit report approximately 7½ years from the date of your first delinquency. It may be best for your score to wait for the information to fall off on its own. Paying on the accounts now gives the derogatory accounts greater weight, due to there being recent activity on the accounts. If you are positioning yourself for a home purchase a couple years down the road, waiting seems to be the best course.

It is important to remember that just because a debt falls of your report, it does not mean that your obligation to pay the debt has expired. Collectors can still come after you. You should determine if the debts have expired due to the statute of limitations, to know whether or not you still have a legal obligation to pay, in case creditors come calling. Lastly, collectors can try to collect on expired debt, so check the SOL and don't assume you owe, if a collector attempts to collect.
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John B.
Genesee, NY  |  September 08, 2011
Thanks for the fast reply! How do I find more information on these "SoLs". The only information I have now is the date of the inital file, and a phone number of the collection agency "incharge" of it.
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Bills.com
September 09, 2011
You can view statute of limitations information for your state, to start.

Use your recollection of when the medical bills occurred and when you last paid them, combined with what shows on your credit report for last activity. It is a safe general assumption that, by the time the debt was in the hands of a collection agency, at least six months of non-payment had passed.

Your original comment did not indicate that collection agencies were contacting you. Any time that a colletion agency initially contacts you, it is wise to validate the debt. If the SOL has not run out, it is possible that you could be sued and a judgment issued, which would hurt your credit score and give the collector additonal time and means to collect from you. Please factor all of this into your decision.
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John B.
Genesee, NY  |  September 09, 2011
To be honest I have moved several times and didn't always change my address, but Ive been at my last residence for over 3 yrs. now. I dont if any of them have been contacting me.
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Sam .
September 01, 2009
Who is responsible for paying a medical debt, which determines on whose credit report the account will appear, depends on who signed as the responsible party at the time of treatment. The patient is generally presumed to be the responsible party if he/she is not a minor; however, some medical providers will ask the person bringing the patient to the hospital, often a spouse, adult child, or other relative, to sign an agreement making him or her financially responsible for the cost of the treatment along with the patient. Since you were the primary policy holder on the insurance, it is possible that the facility entered in their system that you were responsible for payment even if you didn't agree to be the responsible party. In that case, you did the right thing by disputing the debt with the credit bureaus; you may also want to send a letter to the hospital or its collector disputing your liability and demanding that they provide proof that you agreed to pay for your husband's treatment. If they are able prove that you agreed to pay, then you may have no choice but to pay the debt or suffer the damage to your credit. On the other hand, the provider may have no proof of your liability, in which case it would be required to remove the listing from your credit reports; your husband would probably still be liable for the debt, though, so if it is not on his credit report now, the creditor may choose to report it in his name instead. You can visit www.bills.com/credit for more information about resolving credit disputes and to find answers to other credit-related questions. Good luck!
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Marissa .
August 27, 2009
I have a collection account from 2007 from a hospital which I took my husband but It shows on my credit report as joint with my husband . I disputed the collection and am now wating for a response from all experian. I want to know if they can take it off my credit and put it on his. I was just the insurance carrier this should go to his credit not mine right?
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Bills.com
February 23, 2009
If you pay off the cards to lower than 30% of the credit limit today, you will need to give it at least 30-60 days during which the lower balances will be reported to all the 3 bureaus. Once your balance are reported low, you should be able to see a jump in your credit score.
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Sean .
February 22, 2009
I have never had a late payment on any of my credit cards...... but they are all almost maxed out from a new business I started .....As a result my credit score is now low even though I have never missed or been late, I'm about to pay them off all under 33% of the total credit line for each card...... How long will it take for my credit to get back to normal or rise so that I can look into getting equipment loan for my business and or higher the lines of credit available on my cards???? If I was paying them off today would my score raise instantly, in a week, a month or would it take a full 90 days??? Please Help!!!
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Bills.com
February 02, 2009
All accounts stay on your credit report for about 7 years, especially accounts that you missed payments on. I think what you need to focus on is the last payment date on this account, this can be found on the credit report. Depending on when the last payment payment was made, the Statute of Limitations might have expired on this debt. Different states have different Statute of Limitations (see http://www.bills.com/collection-laws/). If the Statute of Limitations has expired, then regardless of the status of the account (open or closed) you are not liable to pay the account. Keep in mind however that this does not stop the creditors from persuing their collection efforts on this debt, just means that if they ever sue you in court, you will have absolute defense as the statute has expired.
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Melissa .
January 31, 2009
Recently, I had been working on my credit report and paying off old bills. I had contacted one company that had a bill on my credit report. The lady at the company told me that there were two other bills in their account for me, but I was concerned with the bill on my report because the other two were from 2000 and Nov. 2001; however, the bill on my report was from 3 days after the Nov. 2001 bill. I spoke to the lady and asked for a written letter verifying the bills, and she could send me the letter with the other two accounts so I can also verify them. I recently received the letter but it came as a bill form as an "open account". My questions are if I decide to wait on paying the one bill on my credit report, when approximately would it come off my report?, and secondly, can companies that do not have a bill on your report or has been old or over 7 years, if after being contacted from me, put the bill BACK on my credit report?
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Bills.com
December 08, 2008
In reality, if you had lived in one location for an extended period of time you would appear more stable and that could positively impact your credit score. Practically speaking, however, this is a very minor variable in your credit score. You would get MUCH more bang for the buck if you paid down debts, lowered your credit utilization, maximized your free cash flow and built a nice down payment for the home. DTI, LTV, and credit utlization have a much larger impact on credit.
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