Debt Collection TacticsDebt Collection Tactics: Dealing with a Collection Agency

December 12, 2011 | Author: | Posted in Finances

Having a debt collection incident can be detrimental to your credit score. A collection is a severely past due account that will make it more complicated for you to get approved for new credit and loans. Collections are handled either by the person to whom you owe the money or a third party, like a collection agency. This is especially true for more recent collections. You can improve your credit score by deleting these collection accounts from your report or changing the status to “Paid” or “Current.”

Before you pay off a collection account, you should negotiate with the collection agency to make sure that your credit report is updated in some way that is favorable. The only intolerable outcome is to pay the collection without having that fact reflected in your credit report.

Work with the debt collector to have the account deleted from your credit report in exchange for paying your debt. Send a written request (also known as a “pay for delete letter”) to the collector offering a settlement payment if the collector removes the account from your credit reports. Wait for a written response from the collector before making a payment.

Another thing you can do is to make contact with the collector on the phone to negotiate pay for removing your collection. However, you risk inadvertently saying something to the collector that communicates responsibility or liability for the debt. You want to avoid from this if you are beyond or nearing expiration of the statute of limitations. Even if you decide to negotiate by phone, you will still have to have the agreement in writing. Have the collector mail or fax you a letter including the particulars of the agreement before making a payment.

In a perfect world, you want the entry completely taken out from your credit report. Unfortunately, not all collectors are able to do this even in exchange for payment. If you cannot have the entry completely removed, you should have it updated as “Paid in full.” Offer the collector a deal some percentage less than the full amount owed. The agreement should once again be in writing.

Do you feel that you’re interested in learning more about debt collection? Are you looking for a great collection agency? Contact Rapid Recovery Solutions now!. This article, Debt Collection TacticsDebt Collection Tactics: Dealing with a Collection Agency is available for free reprint.


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