October 26th, 2013
Infographic: Who Has the Most Open Collections Accounts?
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This week’s infographic takes a look at how many Credit Karma members have collection accounts. The numbers are pretty staggering—some members have over five accounts in collections. Scroll down to see the results.
If you happen to fall in one of the groups above and have at least one account in collections, chances are you’ve been notified by a collections agency. All the letters and calls can be overwhelming; here are some tips on how to handle debt collectors.
Once you receive a letter or call from a collections agency, look into where the debt came from and how it might be impacting your credit score. Check out your credit score and credit report card for free with Credit Karma.
Don’t Ignore Communications
Consumers, once contacted by a debt collector, only have 30 days to request written verification of that debt. Creditors, according to the Fair Debt Collections Practices Act (FDCPA), must prove they are legally allowed to collect the debt. Once you request this verification, all communication with you must cease until you receive a reasonable response.
Know Your Rights
Debt collectors can contact you, but they can’t harass you. Again, the FDCPA explains in detail how collection agencies can and can’t treat people. If you encounter threatening or abusive language, contact the Federal Trade Commission or your state attorney office– this behavior is illegal.
Ask for an Update to Your Credit Report
If you are able to pay down the debt, check and see if you can get the derogatory mark removed from your credit report. You can write a “pay for delete” letter that asks the debt collector whether paying in full or an agreed upon amount will remove the accounts from your report. If you are unsuccessful, ask if they will at least update the debt to say “Paid in full” once you’ve paid off the debt.
Keep Copies of All Communications
Keep track of all the dates and times you received a call from a debt collector, including voicemails. Take notes during the phone calls and save all written communications with the collection agency. Having a paper trail is important if you need to take legal action against the debt collector.
Bottom Line: Of course, the best thing is to avoid having to deal with debt collectors in the first place. If you are getting behind on a bill, reach out directly to the original creditor. There is a chance you might be able to negotiate a repayment plan before your debt is sold off.
Do you have any experience with debt collectors? Share your story below.
Amy Leone is the Public Relations Coordinator at Credit Karma. Before joining the team in June 2012 she spent most of her career as a TV news producer. When she’s not helping promote Credit Karma on a variety of media outlets, she’s probably out running or exploring her new state of California.
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