Is it best to pay a collection account on my credit right away?

Q: I found a collection account on my credit report and wasn’t sure what to do. I was going to pay it immediately but after listening to the radio show, I wasn’t sure if it was the right thing to do.  Please let me know.

A: Collection accounts occur when a consumer defaults on a debt and the creditor has had no success in getting payment.  The original creditor sells or lends the debt to a collection agency.  The collection agency is a third party that gets paid a commission or profiting above the purchase price on funds received from the debtor inflatable santa claus.

There are laws that apply to collection agencies and rights that you have when dealing with them.  The first thing you should do is call the collection agency to find out who the original creditor is and whether you recognize it as a legitimate debt.  When calling the collection agency, do not answer any questions about the debt–just find out who the creditor is, what the debt is for, and how much is owed.  Once you get this information, you can send us a copy of your current credit report and call us to discuss your options. Do not make payment until we speak.  According to the law, the collection agency does not have to remove the delinquency on your credit report, even if it is paid.  The only obligation they have is to update your credit to reflect that it is paid, which will not change the harm the derogatory that has been done to your credit score. This type of negative credit can remain on your credit for seven years inflatable santa claus.

Once you give us the info requested and copy of your report we will be able to give detailed feedback and advice.  Feel free to email me at tracy@northshoreadvisory.com or visit our site North Shore Advisory, Inc. <http://northshoreadvisory.com/>

Filed Under: Credit