How to Deal with Collection Accounts and Pay Them the Right Way
Hey, credit warriors! 🎙️ Welcome back to "My Credit Sucks." Today, we’re diving into a topic that stresses out a lot of people: dealing with collection accounts. We'll cover what collection accounts are, what debt collectors can and can’t do, how to handle those annoying calls, and the right way to pay off these debts. Let’s get into it!
What is a Collection Account?
- A collection account pops up when you’ve missed payments and your debt is handed over to a collection agency.Â
- This can tank your credit score, making it harder to get loans, credit cards, or even rent an apartment.
What Collection Agencies Can and Can’t Do:
What They Can Do:
 - Contact you to ask for payment.
 - Report your debt to credit bureaus.
 - Take legal action if necessary.
- What They Can’t Do:
 - Harass, threaten, or use abusive language.
 - Lie about the amount you owe.
 - Contact you at inconvenient times or places, like at work if they know your employer doesn’t allow it.
How to Deal with Collection Accounts:
- Verify the Debt: Make sure the debt is yours. Ask for proof if you’re unsure.
- Know Your Rights: The Fair Debt Collection Practices Act (FDCPA) protects you from abusive practices. Know what collectors can and can’t do.
- Negotiate: You might be able to settle for less than you owe. Always get any agreements in writing.
- Get It in Writing: Don’t agree to anything over the phone. Make sure you have written confirmation of any payment plans or settlements.
The Right Way to Pay Collection Accounts:
- Prioritize Newer Debts: They have a bigger impact on your score.
- Pay for Deletion: Negotiate with the collector to remove the account from your credit report once it’s paid.
- Avoid Lump Sum Payments Without Written Agreements: Make sure the terms are clear and documented.
- Keep Records: Save all communications and receipts in case you need them later.
- Check Your Credit Report: After paying, ensure the collection account is updated correctly
- If you found this episode helpful, please subscribe, rate, and review our podcast.
- Send in your questions about dealing with collections – we might answer them in a future episode!
Social Media:
- Follow us for more tips and updates.
-@mycreditsuckspodcast
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Thank you for tuning in to "My Credit Sucks." Remember, dealing with collection accounts can be stressful, but with the right strategy, you can tackle them effectively and improve your financial future. See you next time! 🚀💳
Have any credit questions? Feel free to send me an email to contact@mycreditsuckspodcast
Access your full credit report for $1.99 (it won't impact your scores) click here: https://www.smartcredit.com/?PID=12984
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