Credit Repair Part 3
Try And Circumvent The Collection Agency
The final and worst step that a creditor will take is to sell your
outstanding debt to a collection agency. In terms of credit repair, this is
basically the worst thing that can happen: it means whomever you
owed money to deemed their chances of recovering it so low that they
we're willing to lose some of the debt. In most cases the creditor sells
the debt to the collection agency at a heavy discount, often half the
amount owed.
When a debtor had sold your loan to a collection agency, they have
"written it off" and created the lowest possible mark on your credit
report. If this happens try and act as soon as possible after being
contacted by the collection agent. Before you negotiate with the
collection company, talk to your creditor. See if the creditor will remove
the "write off" mark from your credit history - this is something they will
do sometimes, in exchange for immediate payment. The basic idea is
you want to do whatever you can to get your debt out of the hands of
the collection agency and back in the hands of the creditor - in other
words you want to clear the debt with the creditor, if at all possible.
If your creditor is not interested in negotiating payment, you're stuck
with the collection agent. The collection agent is likely going to take a
very intimidating and threatening position, and will usually imply that
they are willing to take you to court. The two points you should keep in
mind is that the collection company bought your debt for less than the
debt's amount, and it's unlikely they will take you to court. You best
solution is to offer to make an immediate payment for less then the
actual balance of your debt. Most companies are going to accept this -
they're usually making a profit on any payment that's more than 50% of
your debt, and by offering to pay immediately you allow them to close
your file and spend their man-hours elsewhere. When dealing with a
collection agent, only offer full payment as a last resort.
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