The same day you receive a notice in the mail from a collection agency that they have acquired one of your accounts, call the original creditor, whether a credit card company, retail store, or doctor’s office. This information must be on the mailed notification. Speak with the original creditor’s finance department or billing specialist. Be honest about why you have not made payments and ask if you can set up a monthly payment you can afford. Then, ask if they can retrieve the account from the collection agency. The sooner you do this, the more likely the account will be returned and will NOT show up on your credit as a collection.
If you receive a phone call from a collection agency, your sole focus should be on getting them to send you confirmation in the mail that the account is yours. NEVER give debit, banking, or credit card information to a company that calls you. Arrange all your payments by mail unless you are 100% sure of the legitimacy of the collection agency. Legitimate collection agencies will not threaten you, verbally abuse you or harass you.
If a collection account makes it onto your credit report, what are your options?
When a collection account ends up on your credit report, it has a negative effect on your credit rating.
That said, the newer FICO scoring models ignore collection accounts that have zero balances, even if they remain on your report for seven years. The sooner you can arrange to pay off your collection accounts, the sooner your credit rating will improve.
Now that you know how to deal with some of the negative events on your credit report, let’s discuss five general steps you can take that will have a positive effect on your rating.
