Got a 'Collection' on Your Report? Now What?

A collection on your credit report can feel like a big problem. It hurts your credit score and makes it difficult to get loans. But you can't fix a problem you don't understand. The first step to taking back control is learning what a collection is and how to find it on your credit report. This article will show you exactly how to do that.

What is a Collection?

A collection can start with an unpaid bill. You might miss payments on a credit card, a medical bill, or a utility account. After several months of non-payment, the original creditor gives up on collecting the money from you. At this point, they will likely "charge off" the account.

This does not mean the debt is gone. The creditor will often sell your debt to a third-party collection agency. They sell it for a low price to get some money back. The collection agency now owns your debt. Their only job is to get you to pay. When this happens, a new negative item called a collection account is placed on your credit report. This account is separate from the original one, which will show as charged off.

How to Find a Collection on Your Report

You need to look at your credit reports to find a collection. You have three reports from three different credit bureaus: Experian, Equifax, and TransUnion. A collection agency might only report to one or two of them. You must check all three reports to see the full picture. You can get your free reports from the official government-authorized website.

Once you have your reports, you need to know where to look. The information is not hidden, but you need to navigate the document. Scroll past your personal information, like your name and addresses. Look for a section with a title like "Collection Accounts," "Potentially Negative Items," or "Adverse Accounts." Your report groups all collection accounts together in this section.

Understanding the Details of a Collection

Finding the collection section is the first step. Understanding what you are seeing is next. Each collection entry contains important clues for how to fix it.

Original Creditor and Collection Agency: The entry will list the name of the collection agency that now owns the debt. It should also list the name of the original company you owed money to. For example, a collection entry might show "XYZ Collections" as the agency and "City Hospital" as the original creditor. This helps you identify the source of the debt.

Account Numbers: You may see two different account numbers. One is your original account number with the first creditor. The other is a new number assigned by the collection agency for their internal records.

The Amount: The collection amount may be higher than the original debt. The collection agency may have added interest and fees. This is a common point of confusion. The amount listed is what the agency claims you now owe.

Key Dates: Dates are the most critical part of a collection entry. You will see a "Date Opened" or "Date Reported." This is the date the collection first appeared on your credit report. More importantly, you must find the "Date of First Delinquency." This is the date you first missed a payment on the original account and never caught up. This date determines how long the collection can stay on your report, which is typically seven years. Knowing this date is essential.

Common Issues with Collection Accounts

As you review the collection entries, be aware of some common problems. A single unpaid bill can sometimes appear as multiple collection accounts. This happens if the debt is sold from one collection agency to another. You must identify each one to understand the full scope of the problem.

Also, look closely at the dates. Sometimes, a collection can be "re-aged." This happens if the Date of First Delinquency is incorrectly updated, making the collection appear newer than it is. This can illegally extend the seven-year reporting period. Paying close attention to dates helps you spot these serious errors.

Finding every collection on your reports is the true starting point for credit repair. It gives you the information needed to challenge inaccuracies or negotiate the debt.

Have you checked all three of your credit reports for collections in the last year?