A debt collection company is a company or agency that collects payments on outstanding debts. Debt collectors work for creditors, such as banks, credit card companies, and retailers. They may also be buyers who purchase debt at a fraction of its face value with the intent of recovering the entire debt owed.
If you have defaulted on your payments or any outstanding debt, you may have received regular phone calls and letters from a collection agency trying to recover the debt.
If you are in such a situation, understanding how debt collectors work will help you know how to deal with them. We will discuss all you need to know about debt collection and the debt assistance available to you.
When you stop making payments, your account is sent to a debt collector, and this information shows up on your credit report as collections. Your credit score takes a hit, and you start receiving calls and letters from debt collectors. But what can you do when a debt collector contacts you?
Reputable debt collectors do not use scare tactics or intimidation to retrieve money from the past-due account. Instead, they should name the original creditor, including how much you owe them. They should also inform you that you have 30 days to dispute the debt in writing if the collection account is erroneous.
If a debt collector contacts you, you have the right to request verification of the debt. If they can’t prove that you are the defaulter, you can ask them to cease contacting you and to remove the collection from your credit report.
Debt collectors work on a commission basis, meaning they only get paid if they successfully collect payments, or they may also charge a fee for their services.
If you cannot agree with your debtor, you can use an attorney to advise you on the best action to take. Credible credit repair companies also help negotiate with debtors on your behalf and also provide financial advice regarding your debt.
Debt collectors typically contact debtors by phone, email, or letter to request payment. If you do not respond to a debt collector’s request for payment, the debt collector may take legal action, such as filing a lawsuit to recover the debt. If the judgement is passed against you, a debt collection agency may seize your possession or wages to pay for the debt.
Ignoring debt collectors is also detrimental because your debt will keep growing as interest will keep piling up.
When you ignore debt collectors, you may miss validating if the debt is legitimate or not. This may harm your credit score even though the debt is erroneous.
Whether it’s legitimate or not, getting in touch with the debt collector provides more insight into the debt. If it turns out that there was an error in the collection letter, it helps prevent any late fees or penalties from being charged against your account.
N/B: If you receive a court summons regarding your debt, it is wise not to ignore it as it may be legitimate. Unscrupulous debt collectors may fabricate one. However, you should look up the court’s contact information online to confirm the accuracy of the notice. To avoid manipulation from unscrupulous debt collectors, do not use the contact information on the document you receive.
If a debt collector has contacted you, you have certain rights under the Fair Debt Collection Practices Act. For example, a debt collector may not contact you at an unreasonable time or place or use abusive or threatening language.
Debt collectors can not pretend to work for a government or consumer reporting agency. They are also prohibited from publicly shaming you for your debt or collecting a debt you don’t owe.
A debt collector is forbidden from calling you before 8:00 a.m or after 9:00 p.m. If you request in writing for them to stop calling you regarding your debt, they are mandated to honor your wish and stop contacting you.
If you think a debt collector has violated the Fair Debt Collection Practices Act (FDCPA), you can file a complaint with the FCPB.
You can remove collections from your report by disputing inaccurate information such as:
People do many things when they find themselves in financial trouble, such as late payments, but they don’t always think through the consequences of their actions. Before you pay off collections, you should ask yourself these questions:
You are required to pay your debts on time to have a good credit score. However, if you are late on payments, debt collectors will try to collect the money owed to them. You will receive lots of calls and letters as they try to collect a debt. If you feel they are harassing you, you can write and ask them to stop contacting you or file a complaint. Here at Ascent Network, we help you manage your debts and remove collections from your report to maintain a good credit score.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States, and it is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
When you fail to honor your debt obligation, your creditor sells your debt to collectors, and the negative information is reported to the three major credit bureaus (Experian, Transunion, and Equifax).
Collections accounts stick to your credit report for seven years from when your account became delinquent, making you look uncreditworthy to potential creditors. Here are some steps to increasing your credit score by removing collections.
To get collections off your credit report fast, you must be proactive and check your report thoroughly. Get your free credit report by visiting AnnualCreditReport.com or from the three major credit bureaus. Compare the details against your records. If you don’t have your payment records, log into the account to check your payment history.
To check for negative accounts, go to the credit history and accounts section to find information on missed or late payments. Check the account status to see if it’s paid, charged off, or closed. Check the account number and the date the debt became delinquent. Once armed with these details, you can take the following steps:
Dispute a collection account if:
A delinquent account falls off your credit report seven years from the date it went delinquent. However, you may still find the account is not closed. File a dispute with the credit bureau, so they can remove the collection report from your account.
If a collection report is incorrect, gather all the documentation to show the collection appears on your report erroneously. Send a dispute with your correct contact information, indicate the mistake with account numbers, and explain how the information is incorrect. The bureau will have 30 days to correct the errors.
The best dispute reason for removing collections is by asking the collection agency to validate the debt. Most often, documents get lost as debts are shuffled from one collection agency to another in an attempt to recover their money. In such scenarios, original documents get lost, and inaccurate details are passed on to debt collection agencies.
You should use this loophole to ask them to verify if the debt belongs to you. They will have to remove collections from your credit report if they can’t validate the debt.
When the above steps don’t work, you need to ensure you don’t cause much damage to your credit score. You need to continue paying your debt as you wait for validation from the credit bureau or until you pay your debt fully. You can arrange a payment plan with your creditor and stick to it.
Once a collection account is reported to the three major credit bureaus, the negative information will remain for seven years. Unfortunately, despite having paid your debt fully, some lenders will consider this information when offering you loans. This affects the interest rate because they consider you uncreditworthy and offer you loans with higher interest rates.
Consider writing a goodwill letter, sending it to the collector or creditor, and politely asking them for a goodwill deletion by pointing out that you have fully paid the debt. If the creditor or collection agency agrees, ask for a written agreement that you can present to credit bureaus just in case the agency fails to update them.
Credit score improvement depends on several factors, such as the scoring model used and other items found on your credit report. In fact, paying off your debt can hurt your score at first before you see major improvement. However, you may see some positive changes a month or two after updating the collection account.
Credit repair companies like Ascent Network are experienced in credit score improvement. They know how to negotiate with creditors to remove collections from your report to improve your credit score.
Credit repair companies get much better results than you would alone. They offer additional information that helps you improve your score even further. Before you choose a credit repair company, ensure they are reputable.
It is possible to remove collections from your credit report to improve your credit score only if you become proactive, check your credit report, analyze the information, and take the necessary steps. You can also use a reputable credit repair company with the experience to improve your score.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
If you want to stay on top of your finances, a good credit score is essential. There are things that will improve your credit score.
Your credit score can help you qualify for loans. It gives you better interest rates and even gets you a lower insurance premium.
If your score is not looking good, It is worth taking the time to improve your number. Here are seven things you can do that will help improve your credit score.
This is the first point that can’t go without mentioning. It is what gets most people on the lower end of the score. If you want a good credit score, you need to pay all your bills on time. This has the biggest impact on your overall rating.
Your credit utilization ratio (how much of your available credit you’re using) is another major factor in your FICO score. Keeping your balances low will help improve your score in this area. Avoid using more than 30 percent of each card limit each month.
The higher the balance in comparison to the limit, the more it can affect your score negatively. Utilizing less than this amount will help keep your score up while paying down balances. This means if you have $15,000 in available credit across several cards and use more than $5,000 at any given time, it can hurt your score.
Every time someone pulls your credit report, it shows up as an “inquiry” and can lower your score slightly. Credit inquiry doesn’t have a huge effect as long as you get the quotes within 30 days of each other. Doing so will limit the impact on your credit score. Also, ensure you aren’t opening many new accounts or have more than six inquiries.
When applying for new credit cards or loans, get quotes within 30 days of each other. Doing so will limit the impact on your credit score.
If you suspect unauthorized inquiries, dispute those errors, and the fastest way to dispute and boost your score is with the help of a credit expert like Ascent Network. Limit Inquiries on Your Credit Report.
Paying off debts is a great way to improve your credit score or utilize debt consolidation services. The lower the debt you have, the better your chances of improving your score. You can also consolidate your debts into a single large debt with favorable interest rates and payoff terms and pay them quickly. Focus on paying off your credit cards with the highest interest rates first and, if possible, pay more than the minimum payment due.
Don’t close old accounts that you don’t use anymore. But rather keep them open and active by using them once in a while. If they don’t have an annual fee, there’s no reason to close them in order to improve your credit score.
If you have bad credit, you’re not alone. According to the Federal Reserve, more than half of Americans have a credit score under 680.
It is very important to check your credit history at least thrice a year to know your credit score. You will detect fraudulent activities since it is easy for criminals to open credit cards in your name.
A secured credit card will help you manage your finances better. You will be required to deposit some cash to open the account. Credit card companies will report your credit score to credit bureaus as you keep using the secured credit account. So, be sure to make at least minimum payments on time to improve your score.
What should you do to manage your finances and not default in repaying your debts? Organize: Make sure your files are in order, so it’s easy to find bills and statements needed to create a budget.
Key Takeaway
Credit scores are used by lenders as a way to predict how likely you are to repay the money you borrow. The higher your score is, the more willing lenders will be to take a chance on you. People with higher scores than yours are offered lower interest rates and better terms on loans and credit cards. It is best to take charge and improve your credit score to enjoy the
benefits.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho
Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
A debt collection company is a company or agency that collects payments on outstanding debts. Debt collectors work for creditors, such as banks, credit card companies, and retailers. They may also be buyers who purchase debt at a fraction of its face value with the intent of recovering the entire debt owed. If you have … Continued
Read MoreWhen you fail to honor your debt obligation, your creditor sells your debt to collectors, and the negative information is reported to the three major credit bureaus (Experian, Transunion, and Equifax). Collections accounts stick to your credit report for seven years from when your account became delinquent, making you look uncreditworthy to potential creditors. Here … Continued
Read MoreIf you want to stay on top of your finances, a good credit score is essential. There are things that will improve your credit score. Your credit score can help you qualify for loans. It gives you better interest rates and even gets you a lower insurance premium. If your score is not looking good, … Continued
Read MoreWE COMMUNICATE WITH ALL THREE CREDIT BUREAUS FOR YOU:
