Working 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.
How Damaging Will a Collection Be to My Credit Score?
Once a debt becomes a "charge-off," your credit score will suffer even more. The charge-off will cause the credit entry to change from bad to worse. The reporting of collections on your credit report can take different forms, such as unpaid collection, collection - paid or settled for less, or paid collection.
Even if a collection is paid, lenders are aware that you once defaulted. They look for this type of activity as a way of determining your credit history and the possibility that it may happen yet again.
Can Collections Be Removed?
The short answer is YES! Collections do not have to stay on your credit report for the next 7 years. Quite the opposite is true.
Unless you attempt to remove a collection, the credit bureau or creditor will determine how long the collection will stay on your credit report. Therefore, it is up to you to convince these businesses to report accurate information. In essence, you are in a position to clean up and rebuild your own 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.
Ultimately, you will need to dispute every negative entry on your credit report. Often, following this procedure will result in the removal of several negative entries with no additional follow-up.
If a Dispute Does Not Work, What Next?
If your dispute is unsuccessful, you may consider additional methods. At this point, an experienced and knowledgeable attorney may be helpful. - 29970
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.
How Damaging Will a Collection Be to My Credit Score?
Once a debt becomes a "charge-off," your credit score will suffer even more. The charge-off will cause the credit entry to change from bad to worse. The reporting of collections on your credit report can take different forms, such as unpaid collection, collection - paid or settled for less, or paid collection.
Even if a collection is paid, lenders are aware that you once defaulted. They look for this type of activity as a way of determining your credit history and the possibility that it may happen yet again.
Can Collections Be Removed?
The short answer is YES! Collections do not have to stay on your credit report for the next 7 years. Quite the opposite is true.
Unless you attempt to remove a collection, the credit bureau or creditor will determine how long the collection will stay on your credit report. Therefore, it is up to you to convince these businesses to report accurate information. In essence, you are in a position to clean up and rebuild your own 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.
Ultimately, you will need to dispute every negative entry on your credit report. Often, following this procedure will result in the removal of several negative entries with no additional follow-up.
If a Dispute Does Not Work, What Next?
If your dispute is unsuccessful, you may consider additional methods. At this point, an experienced and knowledgeable attorney may be helpful. - 29970
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