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Credit score impact of ignoring sold derogatory accounts.

What is the impact of a sold derogatory on your credit score?

The CFPB has been working very diligently in the credit industry and they actually have been doing some good things. One of the complaints that the CFPB is getting are how sold derogatory accounts are handled.

Currently, when a collection is sold, that collection should be reported as zero. The balance would be transfer to the new reporting company. What the CFPB is putting pressure on how collection companies are reporting accounts. In response to this CFPB pressure the collection industry is actually considering not reporting sold collections anymore.

Basically when consumer\\u2019s collection accounts are sold to another collection company first collector would then not report the original collection anymore. \\xa0The collection account would come off the report. There still will be one collection as opposed to four, five or six collections.

They proposed that consumers would only have the one collection that was active the other ones would not report anymore. A recent study from Vantage said that the material impact of removing the sold collections is not material enough to reduce consumer\\u2019s credit score.

Vantage\\u2019s findings that really no predictor whether you had five collections were stolen your credit report or one it doesn\'t predict how you\'re going to pay back the bill it just predicts the behavior of the credit and collection companies that keep selling the data

Hopefully, I believe that collection companies will stop reporting the accounts when it is sold. In the future if a consumer that had collection sold five times it will only show up at one time and then the other four will come off. It is not law yet but it\'s something that they\'re looking in to. They have evaluated the impact from a scoring perspective and it is really no impact.

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