PAYING A DEBT COLLECTOR DOES NOT HELP YOUR CREDIT
In fact, it doesn’t remove the account from your credit report at all! Shocking, right!? Yea, did you know that banks and credit bureaus make money from your bad credit?
When a consumer has had a collection account floating on their credit report, most often with credit cards, it reports as a Charge Off from the original creditor then, classified as “Junk Debt”. When the original creditor declares that the amount owed is unlikely to be collected (which is typically 6 months of delinquent payments) junk debt collectors tend to flock in like vultures to purchase the consumer’s delinquent account for pennies on the dollar.
If the debtor rushes to pay this collection, not only will it report as a paid collection account, but the Federal Statute of Limitations states that an item is reported for 7 years on the date of last activity.
This could mean it can report from when the first late payment was missed, or from the date that the account was paid.
HOW DEBT COLLECTORS ARE AFFECTING CONSUMERS
Debt Collectors are affecting consumers. What are they doing for you as a consumer?… Nothing good of course. When a debt collector purchases a consumer’s delinquent account this gives the collectors a chance to tag on any extra fees and next thing you know, the original collection amount doubled!
Now, if the debtor pays this account they’re agreeing that they owe the total amount without any verification that they specifically owe that particular company money. Unfortunately, consumers are guilty until proven innocent, and the Creditors and Bureaus do not make it easy to dispute what’s reporting on a credit report.
Legally there needs to be furnished documents of a consumer’s signature stating that they owe the debt to the junk debt collector in a binding contract, and must be proven to be valid and collectable!
WHAT THIS DOES NOT MEAN
When you hear our representatives tell our clients not to pay a debt collector they are not saying don’t pay your debt at all. It is important to maintain timely monthly payments on auto loans, Mortgages, utilities, and credit cards because a consumer must maintain a positive history as well. Junk debt collectors must jump through a rein of legal hoops to prove that a particular debt is collectable and reportable in which most cases it’s not. If found accountable and valid, a debt collector can still sue the consumer if admitted or found proven guilty of the dues.
BAD DEBT COLLECTORS ARE OUT THERE MORE THAN YOU THINK
Like we said before, pay your debts but don’t pay a debt collector. Most collectors are “Junk Debt” buyers, and they are pushy! Keep in mind, they are paid on strictly commission and s t r e t c h their legal limits as far as they can because ultimately they are paid by YOU, this is exactly how they maintain their vicious and ruthless reputation.
WHAT TO DO IF YOU ENCOUNTER A DEBT COLLECTOR
1) Pull a copy of your credit report: http://MyReportSource.com
2) Schedule a consultation with our Credit Advisor – 1-800-216-2725
3) Know your rights under the Fair Debt Collection Practices Act, or talk to one of our professionals. We can even refer you to an attorney.
