What happens when a debt is sold?

arcon5

Say for example company A lend you £2,000 via a CC. This debt eventually goes to an external collection agency, your CC balance on statements shows as £0 owed as it's now in the hands of the collection agency.

So how is this reported to the credit referencing agencies?

(Forgive me if this is not in the best forum, I couldn't really see a more appropriate one)

sistafromanothermista

As a default if you've missed a payment i would presume (although i'm not sure so forgive me if this is incorrect)
I'm sure someone will be along to advise....

samrw18

It does depend on the companies, but one of two things will happen.

a) (This is usually the case) Debt is reported to CRA from company A as being a £2,000 default. The debt collection agency only update the record when the debt is paid in full (satisfied/settled) or when you pay a full and final settlement. (part settled).

b) (quite rare) Company A stop reporting information to the CRA. (usually shows up as 'unclassified/not updated') (N.B; the last reported status, i.e the worst, will usually still be taken into account by future companies to search your credit file.) then debt collectors pick up where they left off.

Hope this helps!
Sam