Top reasons to pay your collections.
Speaking with a collection company about a debt you owe is like dealing with a school yard bully. These guys are programmed to collect debts so they can get their commission check. If you are getting ready to clean up your credit here are top reasons for paying off your collection accounts.
1. Stop Collection Calls
You will discover that collection calls will not go away until you settle up on the debt you owe. Some professionals recommend that you dispute a collection. Some recommend sending a cease & desist letter. A collection will be on your credit report for 7 years from collection date. The collection will be sold around to other collections companies. Don’t waste your time with disputes and cease & desist letters. Call the collection company work out a payment arrangement or settlement.
2. Keep from getting sued
Some assume that a collection company will make calls and then give up if you don’t pay. This is not always the case. In some situations the collection company will take you to court and get a judgment against you. A public record will be on your credit report for 7 years.
3. Increase your credit scores
The older a collection is the less it will affect your credit score. Since collections stay on your credit report for 7 years, a paid collection is better than a collection not paid. You will find after paying off your collections your credit score will increase.
4. Get approved for loans and credit cards
Some banks will not approve you for a loan if you have outstanding collections on your credit report. In some cases they will require you to pay off the collection and to provide proof you did so. You will not be able to get a car loan, mortgage loan, etc…. A collection on your credit report could also affect certain type of job applications that require employment screening.
5. Debt Free
Settling up on collections you owe means you are one step closer to being debt free. Paying off collections is better for your overall financial health in the long run. If you can afford to settle on your collection accounts, this is the best practice.
Author: Mike Clover
CreditScoreQuick.com
