Collection Agencies and Your Credit Report
Working With Collection Agencies
When an initial creditor decides to stop contacting you to collect an old debt, it is usually assigned to a collection agency. This debt is then known as a "charge-off." Collection agencies are in business because they specialize in getting you to pay off the owed amount.
Will My Credit Score Be Affected By a Collection?
The reporting of a collection will cause havoc with your credit report. Your credit score will decrease as a result of the charge-off and the individual credit entry will go from bad to very bad. Unpaid collection, collection - paid or settled for less, and paid collection are variations which a reported collection can take with regard to your credit report.
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.
Is It Possible to Remove a Collection?
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.
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.
You have the right, pursuant to the Fair Credit Reporting Act (FCRA), to dispute any negative information contained on your credit report. To determine what information is contained on your report, you will need to request a copy of your credit report from the credit bureaus. A separate file related to your credit activities is maintained by each credit bureau.
To begin the process, you should challenge each negative item on your credit report. Several negative items may well be removed by following this procedure alone.
If a Dispute Does Not Work, What Next?
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.
When an initial creditor decides to stop contacting you to collect an old debt, it is usually assigned to a collection agency. This debt is then known as a "charge-off." Collection agencies are in business because they specialize in getting you to pay off the owed amount.
Will My Credit Score Be Affected By a Collection?
The reporting of a collection will cause havoc with your credit report. Your credit score will decrease as a result of the charge-off and the individual credit entry will go from bad to very bad. Unpaid collection, collection - paid or settled for less, and paid collection are variations which a reported collection can take with regard to your credit report.
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.
Is It Possible to Remove a Collection?
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.
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.
You have the right, pursuant to the Fair Credit Reporting Act (FCRA), to dispute any negative information contained on your credit report. To determine what information is contained on your report, you will need to request a copy of your credit report from the credit bureaus. A separate file related to your credit activities is maintained by each credit bureau.
To begin the process, you should challenge each negative item on your credit report. Several negative items may well be removed by following this procedure alone.
If a Dispute Does Not Work, What Next?
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.
About the Author:
We raised our credit scores from the upper 500 range to 745 and 763 in under six months and got approved for our dream home. See proof of our credit repair success at www.creditforcouples.com and get the real truth about lexingtonlaw.com .
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