 TITLE: Derogatory Marks in Credit Reports Slow Amid Pandemic CONTENT: Average Number of Collection Accounts Has Also Fallen\n-----------------------------------------------------\nWhen creditors fail to recoup a consumer's outstanding debt, they often turn to collection agencies to retrieve the funds. Collection agencies that take up the task of contacting the consumer to retrieve the debt receive a portion of any balance collected as compensation.\nFrom January 2020 to June 2020, the average number of collection accounts per consumer also decreased, shrinking by 4%, according to Experian data. The same period in 2019 saw a similar shift, when consumer collection accounts fell by 3%.\nThe 1 percentage point increase could be related to creditors granting consumers additional relief measures to help them during this time. With many accounts deferred, and many others under some form of creditor-issued modification due to the pandemic, accounts that previously would have been sent to collections may be experiencing a temporary reprieve.\nIn addition to any accommodations made by lenders to defer payment on accounts due to COVID-19, additional measures were taken to protect borrowers from collection agencies during the pandemic. The U.S. The Department of Education halted collection of federal student loans, and some states barred debt collectors from garnishing stimulus payment money even if they legally would have otherwise been able to.\nWhen an account is sent to a collection agency, a note of the collection account is listed in a credit report and remains a part of the file for seven years. Collection accounts are considered derogatory marks and can severely impact consumers' credit scores. END