Bills Logo

Collection Agency & Credit Report

Get rid of your debt faster with debt relief

Choose your debt amount

See if you qualify

Or speak to a debt consultant  844-731-0836

Mark Cappel
UpdatedMay 16, 2024

Is the original creditor or collection agent responsible for reporting my payments to the credit bureaus?

I have a credit card that went into collections. I contacted the credit card company and they said I have to deal with the collection agency (River Walk) who bought the account. The credit card company said that the collection agency would notify them when it is paid. 1. How do I get the collection agency to report to the original creditor that the account is paid in full if I settle for less than what is owed? 2. How get the original creditor to update my credit report as paid in full or just paid? 3. How do I verify that the collection agency informed the original creditor that it was paid in full? 4. The collection agency is not on my credit report, should I even deal with them, or not pay it at all?

Three good questions. I will answer them slightly out of the order you asked them for a reason that should become apparent.

Validate debt

If a collection agent demands payment of a debt an individual does not owe, or more than they owe, under federal law the individual can dispute the debt in writing. The formal terms for this process are "debt verification" or "debt validation."

A debtor should, as a matter of course, validate a debt when a collection agent attempts to collect the debt. Why? Just because a voice on the telephone claims that a debtor owes the collection agent money does not necessarily mean the collection agent owns the right to collect the debt, or that the debt is even owed.

It is especially important for a debtor to validate a debt that does not appear on their credit report, if the debt is paid, or if the debtor has no recollection of the existence of the debt. If a creditor cannot verify a debt it may not collect the debt, contact the debtor about the debt, or report it to the credit reporting agencies. See the resource Debt Validation to learn more.

Collection agency & original creditor

An original creditor may hire a collection agent to collect the debt, or may assign (sell) the debt to a collection agent. Most consumer debt contracts give the original and subsequent creditors the right to assign the debt. A collection agent buying a debt will do so for 5 to 50 cents on the dollar. The collection agent has the right to collect the entire balance due plus interest.

If the collection agent is working for hire then when it remits your payment to the original creditor it is the responsibility of the original creditor notify the credit reporting agencies (typically Equifax, Experian, and TransUnion) of the change to the account's status. If the collection agent purchased the collection account it is the responsibility of the collection agent to notify the credit reporting agencies (CRAs) of the change in account status. Failure to report accurate information to the CRAs is a violation of the Fair Credit Reporting Act (FCRA).

Regarding your three questions, it is incumbent on either the original creditor (if the collection agent is actually functioning as an agent) or the collection agent to report settlement of the debt to the CRAs. If you wish to underline this point you can add language to the settlement agreement that states something like, "The creditor agrees to report this settlement to the credit reporting agencies in a timely manner that is compliant with the FCRA." However, since reporting the settlement is a federal law with which the creditor must comply, adding that language is redundant.

I hope this information helps you Find. Learn & Save.



Struggling with debt?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

Collection and delinquency rates vary by state. For example, in North Dakota, 18% have student loan debt. Of those holding student loan debt, 5% are in default. Auto/retail loan delinquency rate is 3%.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.



sshay feliciano, Oct, 2013
I obtained a student loan in 2006 which I can't use because I didn't graduate HS. I was not informed by the institution that I will need my HS Diploma or a GED. Now, I this certificate is useless to me. However, I am in default on my student loan. The account is in collection. Is there anything I can do? BTW, the program I completed is medical billing coder in Georgia.
BBill, Oct, 2013
If you received a federal student loan, complete the Dept. of Education's Loan Discharge Application: False Certification of Ability to Benefit (PDF). Your federal loan will be waived if you were ineligible to receive the loan.

If you have a private loan, contact the lender's customer service department and ask if it has a similar loan cancellation policy. See the article Discharge a Student Loan to learn more.