Collection Agencies
 

 

A creditor may turn your account over to a debt-collection agency if you fall behind or stop making debt payments on your account. This is a sign that the creditor has given up on you making payment. At this point, you will no longer receive past due notices in the mail. Instead, the collection agency will contact you and try to get payment from you.

The Federal Fair Debt Collection Practices Act regulates the actions a collection agency can take.

Under the federal Fair Debt Collection Practices Act, a collection agency:
Must send you written notice of the amount you owe, the name of the creditor to whom you owe the money, and what action to take if you believe you do not owe it.
May contact you in person, by mail, by telephone, or by telegram between the hours of 8AM and 9PM.
May not contact you at work if you tell them that your employer does not allow such phone calls to be received.
May not address you in an abusive manner.
May not call other people (i.e., family and friends) in an effort to collect your debt.

If a collection agency violates those conditions, you may file a complaint with the Federal Trade Commission, your state attorney general's office and/or the Better Business Bureau. If you do this, you must send the collection agency a written notice to stop harassing you and advise them that you have filed a complaint against them.

You can also advise a creditor or collection agency in writing that you refuse to pay a debt or that you wish for them to stop all communication with you. While this doesn't cancel the debt it prevents the collection agency from contacting you until it proceeds with a legal remedy such as a lawsuit, judgments, or lien.

 


























For More Information
Federal Trade Commission
 http://www.ftc.gov/ftc/consumer.htm
1999 Bryan Street
Suite 2150
Dallas, TX 75201-6808
(877) 382-4357
State's Attorney General listed in the telephone book under government listings.
Better Business Bureau listed in the telephone book.

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Credit Rating Agencies
 

 


Credit rating agencies make a profit by collecting information on people's credit history and selling it as credit reports to businesses, employers, and landlords. Credit reports are used by businesses to predict how a person will pay their bills in the future and to measure the risk in lending money to an individual. Under the Fair Credit Reporting Act, a credit report cannot be sold to an employer without your written consent.

Credit reports contain records of: 

Loans, payments, and credit limits during the past 7 years
Bankruptcy, judgments, liens, and overdue taxes
Overdue child support payments
Names of creditors that have recently asked for a report.

 


Companies do not expect a perfect payment history but view unpaid debts negatively. The better your credit history, the higher your credit rating, and the more easily you can access credit.

High credit ratings indicate:
Timely repayment of debt, including monthly bills, credit cards, and loans
Payment of taxes in full
Not dependent upon credit, i.e., not at the maximum of credit card limits
No outstanding bad checks
Inactive credit accounts are closed

It is important to know what is in your credit report because it can contain errors that can lead to your being denied credit. If you want to correct errors on your credit report take the following steps.
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Get a copy of your credit report

  
  Credit agencies don't collect the same information, so get reports from all three national credit agencies to catch errors and safeguard against fraud. Reports cost $8.00.

You are entitled to a free report if you:

  
 
Have been denied credit, employment, or insurance on the basis of a credit report
Are unemployed and looking for a job
Are on welfare
Inactive credit accounts are closed
 
  Review Your Report

  
 
Check that information in the credit report is current and accurate.
Review the credit limit, recent balance and payment information for each account.
If you have separated or divorced, check that all accounts are now listed as “individual” and not “joint with.”
Confirm that accounts you closed are reported as “Account closed at consumer's request.”
If you have changed your name, make sure that your previous credit history has transferred over.
 

 
 
Correct Errors

 		 
 

Call or write to the credit agency and include as much information as possible about each error. The agency should respond to you within 30 days. If it is determined that the agency records are correct, then the debt item will remain, although you can have a statement of explanation included on the report.

Tip: Stay away from agencies that promise to change or erase negative information from your credit report for a fee. Only time or repayment of debts can remove true information. At best, those agencies can do what you can do for free; at worst, they will take your money with no change to your credit rating.

  
  Verify

  
 

Request your credit report again in 30 to 60 days to be sure that errors were corrected, deleted, or that your statement of explanation was included.

  



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