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The Attorney's Guide to Credit Repair Improve Your Credit Score in 24 Hours
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Credit Repair Try To 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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