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What is a debt in collection?

SOLVEDby TurboTaxUpdated 7 days ago

Debts in collection can appear on your credit reports after a certain period of non-payment, typically 180 days, and can cause your credit scores to drop substantially.

While different lenders have different policies, after a certain period of non-payment the original lender may write off a debt as a loss and sell it to a collection agency. The collection agency will then attempt to collect the money owed. The original creditor may not notify you that your debt has been sent to collections.

The original creditor or the collection agency may report the debt in collection to one or more of the consumer credit bureaus – Equifax, Experian and TransUnion – and the debt should show up on your credit reports with a “collection” status. If the original lender writes off this debt as a loss and sells it to a collection agency, the original debt should be updated to show “payment after charge off/collection” (or something similar) on your credit reports. Your credit reports may still show the history of the debt, including the amount that was written off.

How long do collections stay on credit reports?

Debts in collection generally remain on your credit reports for seven years, plus 180 days from when the debt first became past due.

See more here: How long do collections stay on your credit reports?

Can I view my debts in collection on Credit Karma?

Yes! You can check for debts in collection on your TransUnion and Equifax credit reports using Intuit Credit Karma:

Your Experian credit report isn’t available on Credit Karma, but you may want to check there for any collection information too.

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