Dealing with Collection Agencies
A collection, also known as a charge-off, is an old debt the original creditor has given up trying to collect. At the point your debt becomes a charge-off, it is sold to a third party collection agency. Collection agencies are hired because they are experts at getting you to pay.
Will a Collection Damage my Credit Score?
Once a debt has been sold, the way it is reported on your credit record changes from bad (late bill) to terrible (collection). Collections may appear in various forms on your credit report including: unpaid collection, paid collection, or collection - paid or settled for less.
Lenders look for charge-offs, even if they are eventually paid, because this will alert them to the fact that you once defaulted. This type of credit activity will serve as a red flag to them.
Can Collections Be Removed?
A charge-off DOES NOT need to remain on your credit report for 7 years. The fact is people are often successful in removing a charge-off from their credit report.
A collection can remain on your credit report for quite some time and credit bureaus and creditors have no reason to remove erroneous entries unless you dispute the information. As such, it remains up to you to contact and convince the relevant companies that they should erase the negative entry. Only you have a stake is cleaning up your credit.
The Fair Credit Reporting Act (FCRA) gives you the right to dispute negative information. You will need to obtain a copy of your credit report to determine which collection agencies are on your report. Each bureau has a separate file about you so don't expect them to be identical.
The general idea is that you must challenge each and every negative mark on your report. Quite often this process will remove several negative items without any further work.
What is the Next Step if a Dispute Doesn't Work?
If the bureau ignores your dispute or updates the negative item, you may need to try escalated dispute methods. A seasoned attorney can save you money and hours of frustration. - 31377
A collection, also known as a charge-off, is an old debt the original creditor has given up trying to collect. At the point your debt becomes a charge-off, it is sold to a third party collection agency. Collection agencies are hired because they are experts at getting you to pay.
Will a Collection Damage my Credit Score?
Once a debt has been sold, the way it is reported on your credit record changes from bad (late bill) to terrible (collection). Collections may appear in various forms on your credit report including: unpaid collection, paid collection, or collection - paid or settled for less.
Lenders look for charge-offs, even if they are eventually paid, because this will alert them to the fact that you once defaulted. This type of credit activity will serve as a red flag to them.
Can Collections Be Removed?
A charge-off DOES NOT need to remain on your credit report for 7 years. The fact is people are often successful in removing a charge-off from their credit report.
A collection can remain on your credit report for quite some time and credit bureaus and creditors have no reason to remove erroneous entries unless you dispute the information. As such, it remains up to you to contact and convince the relevant companies that they should erase the negative entry. Only you have a stake is cleaning up your credit.
The Fair Credit Reporting Act (FCRA) gives you the right to dispute negative information. You will need to obtain a copy of your credit report to determine which collection agencies are on your report. Each bureau has a separate file about you so don't expect them to be identical.
The general idea is that you must challenge each and every negative mark on your report. Quite often this process will remove several negative items without any further work.
What is the Next Step if a Dispute Doesn't Work?
If the bureau ignores your dispute or updates the negative item, you may need to try escalated dispute methods. A seasoned attorney can save you money and hours of frustration. - 31377
About the Author:
Discover how I raised my credit score from 582 to 745 in four months with the help of Lexington Law. Learn the truth about quickly and effectively deleting bad credit at www.creditforcouples.com.
