A situation with your credit report may arise where TransUnion has removed a derogatory collections statement but Equifax has not.
In fact, this situation isn’t exclusive to just TransUnion and Equifax – it can occur with any combination of the three credit bureaus, including Experian.
Regardless, the situation may be the result of either of the following events:
- a settlement has been reached with the collections agency, or
- a dispute to challenge the correctness of a derogatory statement has been filed with the credit bureaus, who have determined that the statement either:
- does not meet FCRA requirements, or
- cannot be verified by the original creditor
The fact of the matter is, the big three credit reporting bureaus are independent entities.
In many respects, they are competitors with varying business operations and information controls. Sometimes the information displayed is slightly different from one to another.
Banks, credit unions, and businesses choose to contract with one or more credit bureaus based on many different variables, one of which is the cost of reporting to them.
As a result, the bigger the organization, the more likely it can afford to contract with all three.
Smaller companies or credit unions may choose to only report to one since it may prove to be too expensive to report to all.
Regardless, collection agencies typically report to all three credit bureaus. Even so, there are occasional variations on the how and when the information is displayed.
Do you have to dispute with all 3 credit bureaus?
Yes, if you have discovered that all three credit bureaus have a remark on their reports which you believe is incorrect, it is best to dispute with all three in an effort to clean up your credit report.
Each credit bureau has 30-45 days to research the dispute and provide a resolution for the borrower.
If you file a dispute with only one bureau, and they end up removing the inaccuracy, the others don’t have to do the same, since they operate independently.
One bureau will not communicate the results of a dispute with another simply because they are in competition with each other.
Having collections removed from TransUnion but not from Equifax for example, can be the consequence of disputing with only one credit bureau.
Should I dispute the debt with the collections agency?
When a consumer goes through the process of settling collection accounts, they (or their representative) typically deal directly with the collection agency that now owns the debt.
Once a settlement is reached and payment is made as agreed, the collection agency is responsible for:
- reporting the debt as “paid in full”, or
- reporting the debt as “settled for less than original amount and considered paid in full”, or
- deleting the collection from the consumer’s credit report as part of a “pay to delete” agreement with the borrower.
The collection agency is required to report the same information to all three credit bureaus.
If the agreement between the debt collector and the borrower is payment in exchange for collection being deleted from the borrower’s credit history, this agreement applies to all three credit bureaus reporting.
Why are my collections showing on all three reports, but for different amounts?
Collections agencies will report identical information to all three credit bureaus, but this depends on timing (different reporting cycles, process delays), internal operations, and general governance.
As a consequence, sometimes the information may vary slightly or be updated at different times during the month.
How do I make them stop reporting my collections?
If the borrower has fulfilled an agreement with the collection agency to pay off and delete the collections, the borrower should contact the same agency and request to have the reporting verified.
There is always a chance that the collection agency did not report accurately, or reported accurately to TransUnion but not Experian or Equifax for example.
If the collection agency verifies that they are in fact reporting correctly and that the collection should not be deleted, then it is time to contact the credit bureaus directly.
Contact the collection agency directly and communicate the situation by filing a dispute with Experian, Equifax, and TransUnion.
Explain the predicament and be prepared with documentation showing the agreement with the collection agency.
This agreement should have been received in writing via email or hard copy prior to paying the collection.
If filing online, there will likely be an option to upload documents for verification.
The bureau will contact the collection agency and be advised the collection is paid and should be deleted from the credit report.
From there, the credit bureau will correct the reporting and delete the collection from the report.
What about zero balance collections?
If a collection is being reported as paid with a zero balance, it should be noted that the most recent credit scoring algorithms ignore zero balance collection accounts.
So it is personal preference whether to go through the dispute process to remove a paid collection that is no longer impacting credit score.
Depending on length of time, as well as the number of collections present on your credit report, it may still be possible to achieve a relatively good credit score.
Regardless, there is no way to know which scoring model a lender is using. This means there is always a chance an older scoring model is including zero-balance collections as a negative scoring impact.
While this may or may not matter in every situation, it is something to consider when deciding whether or not to file a dispute.