Dear Debt Adviser,
When trying to pay off damaging items on your credit report, how do you figure out things like where to call, whom to pay and where to send the payment? For example, say someone owes money to a wireless phone provider and the account goes into collection. The phone service provider sells the debt to a collector. But the sale of the debt has not shown up yet on the person's credit report. The wireless company won't say anything because they sold the debt to someone else, whose identity they won't disclose.
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So what's the hurry? For a debt to be sold it usually has to have gone unpaid for an extended period of time. Usually, it's at least six months or more overdue before it gets sold. Waiting a little longer won't hurt anything at this point.
When a bill is sold or placed for outside collection, the person answering the phone at the place where you used to pay your bill (or were supposed to, anyway) may not know where it went. The company may use a number of different collectors.
You might try asking to speak to a manager in the accounts receivable department at your wireless phone provider. Someone a little higher up the chain of command may be willing to accept direct payment from you or give you the contact information for the collector. If the manager is uncooperative, try calling on other days of the week and at various times of the day. A different manager may prove more helpful.
If you get a manager who wants to be helpful, I suggest you ask if the company would take the debt back from the collector in return for a full payment right now. This may have appeal since the collector charges a fat fee for collecting a debt and saving money is a great way for managers to distinguish themselves.
However, if the debt has been sold and not just placed with an outside firm for collection, they can't get it back. You'll have to wait until the new owner processes the debt into their system and contacts you.
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Eventually the collector will contact you. When that occurs, request that the collector send you validation of the debt. This way you will be assured that you are being contacted by the entity that really owns the debt.
Keep comprehensive records of who you talk with regarding the account. After receiving information from the collector that confirms they are collecting a debt that you owe, pay them. At this point they may be willing to settle for less than is owed. But paying a settled amount will probably be reported on your credit report as a settled account, in addition to a being a collection account.
That will add to the damage your credit has already incurred. If your credit is already trashed, then a settlement may not have much impact on your credit score. But it may not look good to potential lenders. Be sure you keep proof of payment, together with your notes from communication with the collector, just in case you are contacted about this debt again.
Then, wait a couple of months and be sure that your credit report accurately lists the payment for your debt. Should the collection account be listed incorrectly, dispute the listing with the credit bureau (or bureaus) and be sure to send them proof of payment. Credit bureaus are required to send you a free copy of your credit report once the account is listed correctly.
Going forward, check your credit reports yearly at AnnualCreditReport.com to make certain that no other collection accounts pop up.