Credit Repair Through A Collection Agent

Additional Reading

How often do you find yourself saying: "I wish I knew how to learn more about this topic"

Well, we were listening! And this article is the result. Enjoy.

Credit ratings are based on your credit report. When banks, credit card companies, or any other business loans money to you, they report to an agency your status in terms of making your payments on time, etc. . . The agency then compiles this information into a credit report, which is the ultimate gatekeeper to your credit rating. Negative marks on your credit rating will stay there for 7 years, preventing you from getting most kinds of loans.

When you begin to lapse in payments to a creditor, whether it be loan payments or credit card or financing payments, the creditor will go though various steps in an attempt to receive payment. After a (usually long) serious of warnings, the creditor will eventually sell your debt to a collections company. When a creditor does this, they are effectively "writing the loan off" as they generally sell the debt to a collection agent at a heavy discount. Basically, the creditor has decided that their chances of recovering the loan are small enough that they are willing to lose as much as half of its value in order to stop pursuing it. When this happens the creditor will inform the credit reporting agency, and you will be left with the lowest possible mark on your credit report, which will affect your rating for up to 7 years.

A crucial step to credit repair is take steps to avoid this "writing off" of your debt. You should act as soon as possible after being contacted by a collection agent. The first thing you should do is contact your creditor - not the collections company - and see if you can arrange to clear the debt with them. In many cases, if you agree to repay the debt immediately to the creditor, they will remove the "gone to collection" mark from your credit rating - essential to quick credit repair.

Sidenote: Hope you're finding this useful? I have always been curious about this matter. And when I found very little quality information about it, I decided to share a part of what I've learned about it - which is why this article came to be written. Read on.

If your creditor is unwilling to do this, you're stuck with the collection agency. In terms of credit repair, keep in mind that the mark on your credit rating can't get any worse at this point - the debt is already gone to collection - so take time to consider all of your options. Usually, the collection agent will contact you in an aggressive manner demanding immediate and full payment of the debt, and imply that they will take you to court if this doesn't happen.

It is to your advantage in this situation to understand that the collection company has likely bought your debt at something close to half its value, so any payment higher than that will result in a profit for them. Try and offer to pay less than the full value of your debt immediately. In most cases the collection agent will be motivated to close your file as soon as possible to avoid the process getting dragged out. They will usually be willing to accept a quick payment at a discount so they can move on..

In order to achieve credit repair as quickly as possible, always attempt to pay your creditor rather than the collection agent when your debt has gone to collection. If that fails, offer the collection agent a lower figure than the full loan amount. Full payment to a collection agent should only be offered as a last resort.

What you've just read is only the beginning of a fascinating journey into the subject. There are many more useful resources on this site - I invite you to spend some time exploring them and learning even more.

Free Credit Repair Guide Credit Card Approvals

About the author:

James Mahony is the founder of Free Credit Repair Guide - A Guide Free Guide to Credit Repair and Credit Card Approvals

Tell Me More About Credit Repair
So you want to know more about credit repair, do you? If youíre already searching for information about credit repair even when thereís no need for it yet then thatís great. I commend you for your forward thinking! Because of the economic crisis...

Reversing Credit Repair
If you want to reverse your credit repair and land deeper in debt, let me show you how. Have you ever seen the advertisings that say you qualify for $10,000 in credit and your credit will increase once you accept the terms & conditions and also send...

Credit Repair - How to Deal with A Credit Bureau
To get reliable, useful and well-presented information about credit repair is NOT easy. That's why when I was lucky enough to find an experienced writer who knew a lot about it, I grabbed the chance to offer his content to you, my valued...

Bad Credit Repair
Building your credit after repeated interruptions is a constant headache we all want to avoid. In this article I am going to break it on down for you, since there are many sources that will take full advantage of you when the opportunity arise. If...

Credit Repair: Good Credit References
Unfortunately, there is no magic repair available today. You will need to dedicate a good deal of discipline, patience and effort to the task. It will be a better idea to start with requesting copies of credit report from each of credit reference...

Credit Repair for Identity Theft Victims

How to Avoid Bad Credit and Repair

Home Loans Repair Credit Errors in Three Days

The Importance of Repairing Your Credit Report Yourself

Avoiding Payday Loans for Credit Repair