Double Jeopardy on Your Credit Reports

If you are looking at your credit reports, and seeing a duplicate account appear on the same report, you could be a victim of what I refer to as double jeopardy. This can skew your debt to income ratio, and cause other domino affects. It can also make it look like you have more unpaid collections than you actually do.

One of these duplicate issues is easy to fix, while the other seems unfair, but sticks to you for up to 7 years.

Some of you may be wondering how an unpaid collection account even gets to appear on your credit more than once, and I will get to that below, but first…

What is double jeopardy if not just a question on a game show?

The “double” is an extra credit reporting trade line. A duplicate entry for the same thing.

The “jeopardy” can come from the duplicate entry jeopardizing how much you pay for credit, or whether you can get credit at all!

Fixing Duplicate Credit Reporting Mix Ups

In over two decades of working with people to fix debt and credit problems, I do not see much trouble with getting a mistaken double entry deleted from your credit. You do not need to hire a credit repair company for a simple mix up like this. You can quickly and easily dispute incorrect items off your credit yourself.

Should you bother getting something off your credit if it is not necessarily a negative?

I would.

You may think there is no harm with leaving a positive duplicate on there if you are paying your debts on time, all the time. I can see viewing it as another feather in your credit cap. But the exact same balance showing as owed on your credit reports could skew your debt to income ratio on a future loan, or credit card you may want to apply for. That could result in:

• Paying a higher interest rate than may have been the case otherwise.

• Getting approved for your new credit card, but at a lower credit limit.

• In some instances you can even be declined!

Reviewing your credit at least once a year is just good credit hygiene! Even when you are not looking for new credit. This is a perfect example for why you should do it!

There are many free credit monitoring apps out there, like Credit Karma. You can also get your credit reports from the three main credit bureaus for free every twelve months. During Covid you can get your free credit reports weekly.

When Debt Collections Show Up Twice

Here is where I see the most common type of duplicate credit entry, and the one that comes across as unfair and punitive. One debt collection item on your credit is bad, and it stands to reason that two is worse. Or is it?

Lets say, for example, you have an unpaid credit card with Capital One for six thousand dollars. You could no longer afford to pay them monthly, so you stopped sending any money to them 8 months ago.

Next thing you know you see Portfolio Recovery and Associates on your credit reports. They are now reporting your Capital One balance as being owed to them. It is a duplicate of an already existing negative item on your credit.

If this happens Capital One can still legitimately report that you did not pay them for all those months. But once they sell the legal rights to collect to that debt buyer, they should then show a zero balance owed to them. The debt buyer, in this case PRA, would legitimately be showing the money is now owed to them.

The above example is going to seem unfair to many of us. We are getting two negatives on our credit, when there should be only one. Unfortunately, it is legitimate that you see these two negatives.

It Could be Worse than Double Jeopardy

Before summer of 2017 you could have seen TRIPLE jeopardy if you were sued and a court judgment for this same Capital One account appeared in the public records section of your credit reports.

Luckily, most state civil court judgments no longer appear on our credit reports.

If both Capital One and the debt buyer above were reporting negatively on your credit, and with each of them showing a duplicate balance due to them, that would be double jeopardy!

You can dispute the duplicate and inaccurate information with the credit bureaus in the same way I refer to above.

Both Capital One and the debt buyer will organically fall off your credit reports after 7 years from when you stopped paying the bank. The debt buyer does not get to show on your credit longer than the bank that sold them the debt.

In fact, the particular debt buyer I used in the above example, Portfolio Recovery Associates, currently agrees to be deleted from your credit once you resolve the debt with them. So while PRA could take themselves off your credit before the 7 years is up, Capital One is not likely to. Capital One would still be showing with a zero balance owed in this example.

You can still accomplish most major credit and finance goals if collections on your credit are not showing a balance owed.

If you want to talk to me about any of your debt and credit issues you can post in the comments below, schedule a call with me, request a settlement estimate, or submit your own question using the boxes below.