When a debt collector contacts a consumer, it usually indicates that the creditor has not received a payment on the debtor’s outstanding bill for multiple months. Because these payments are typically well past their due dates, the creditor has entered into a contract with a third-party debt recovery company or in-house affiliate in an attempt to collect the outstanding balance. To obtain the services of a collection agency, the creditor usually pays the company a percentage of any money collected. Clearly, this payment strategy motivates the bill collector to recover as much money as possible.
Perhaps the worst thing a consumer can do is to ignore a bill collector. The sooner a person addresses a debt problem, the better off they will be. It is important to respond as quickly as possible to a debt collector, especially if you are certain the debt is not yours. Frequently, it is a call from a bill collector that first alerts an individual to the potential of identity theft. Moreover, stalling could mean further unwanted phone calls, lawsuits, judgments and more.
Because most creditors report your credit repayment history, when you stop making payments, that information is also passed along to the credit bureaus which ultimately lower your credit score. Frequently, a single collections account can generate multiple derogatory entries on a consumer’s credit report. Often, both the original creditor and the collection agency make separate entries on a single outstanding account balance. As an added insult to a person’s credit score, the amount owed might be listed in multiple sections of the credit report such as the collections section and in the public records section if a court judgment occurred. These types of repetitive entries from one account can drastically lower a person’s overall credit score.
When dealing with a debt collector, it is highly recommended that a consumer review their credit report on a regular basis. This review can help establish the accuracy of listed information and assist with the credit repair process. If an account is entered on multiple sections of a person’s credit report, investigating, challenging, or disputing the unfair repetitive entries could help resolve the problem and increase a person’s overall credit rating.
It is very important to regularly check your credit history and credit score, and for help with this and other issues consider contacting a credit repair agency like Vitesse Financial. For more information or for your free consultation contact them today at 866.407.9110.
