Which Accounts Are Not on a Credit Report Unless Past Due or in Collections?

Consumers who are very serious about their credit score know that any account or past due bill can end up on a credit report, even overdue fines from the library. As time passes, more and more creditors send accounts to an outside collections company rather than deal with the hassle of collecting the debt themselves. To prevent this from happening, you should always pay a past due account.

Identification

As long as you have a legal liability to pay a bill or debt, it can end up in collections. This most often happens with monthly bills, such as rent, utilities and cell phone charges. What matters most is the account going to collections and the agencies finding out about it. Debt collectors often post account details to private databases for the agencies, but some actively report accounts to the bureaus.

Unusual Accounts That Go to Collections

The list of accounts that do not appear on a credit report until they go to collections or the company charges off the debt is endless. They include late fees from video stores and unpaid parking tickets. Governments often send unpaid fines to collections agencies, because it helps recover fines that citizens refuse to pay.

FICO 08

The Fair Isaac Corporation tweaks its formula and releases new credit scoring software every few years. In 2011, the latest version is FICO 08. The most important update for collections in this model is it ignores collection accounts with an original value under $100. This assumes that the lender upgrades their software; creditors that use older software will consider any collection account in their score calculations.

Tip

Never ignore a bill and let it go to collections. Creditors can see it even if the FICO scoring system ignores small collections and may hold it against you or require you to repay it. If you cannot pay a bill now, ask the creditor to set up a payment plan. Also, keep in mind that some nontraditional accounts are starting to appear on credit reports, and missing payments could lower your credit score, even if the account does not go to collections. In 2010, for example, Experian acquired RentBureau, so your rental history can affect your credit.