Having a debt sent to collections is never fun. Aside from the additional fees that typically get tacked on to a debt once it is sold to a collections agency, the methodologies employed by many collections agencies in an attempt to recover a debt such as persistent contact, threats, and menacing letters make for an all around miserable experience.
Along with the hassle of having to deal with a collections agency, having a debt sent to collections also has another negative and often times longer lasting consequence: a lowered credit score. On top of the late payments that have probably already been recorded on your credit reports, when a debt is sent to collections, this may also be recorded on your credit reports and can have a very serious effect on your score.
Fortunately, you may be able to get this collections account removed from your credit reports much sooner than it would fall off naturally if you were to simply wait the 7 years for it to fall off naturally.
Collections agencies have the ability to hurt your credit score by adding negative items to your credit reports, but they really don’t have any interest in your credit score beyond that. They know you care about your credit score and will use it as another tool to get what they want, however, unlike lenders or credit card companies who use your credit score to determine interest rates, a collections company’s interest in your score doesn’t go beyond its utility as a method of coercion. Put simply, once a collections agency gets their money, they don’t have an interest in your credit score.
This is an advantage for you because you may be able to bargain for a better credit score. Before paying off a delinquent debt to a collections agency, or any other creditor who has added negative items to the credit bureaus, try to negotiate a payment for deletion. In exchange for paying off your debt, request that the collections agency remove any negative items they have added to your credit reports. They have the power to do so (anyone who says otherwise is either mistaken or trying to mislead you), and since they are more interested in getting their money than the condition of your credit file, you may find that collections agencies are more responsive than you would think. Just make sure to get any arrangements in writing in case they drop the ball and you need proof of the deal.
Even if you are unable to arrange a payment for deletion, you may still be able to get late payments, collections, and other negative items removed from your credit reports. Taking advantage of a myriad of consumer protection laws, there are a number of credit repair methods you can use to try getting damaging information deleted from your credit reports. You can work to repair your credit yourself or with the assistance of one of the many reputable credit repair companies such as Eastpoint Recovery Group providing services today.