Collection Rules

If collectors begin calling you, it pays to know the limits of what third-party collection agencies can and cannot do. The Fair Debt Collection Practices Act (FDCPA) provides consumer protection, and lets you know how to set limits the debt collector must respect and abide by. The FDCPA prohibits harassment and misrepresentation in cases of collections on the following types of debt:

What’s a Charge-off?

As a last resort, some people who simply can’t meet their payments may be relegated to the charge-off category, which means the creditor or lender feels there is no alternative except to write off the debt and will no longer pursue payment. Charge-offs stay on your credit report for seven years and are considered a serious notation. In addition, some charged-off accounts may be sold to collection agencies at a later date, allowing the collection of the debt to be reactivated, which means more collections calls.

Before debt collectors get involved, you might find it worthwhile to contact the creditors on your delinquent accounts to set up new payment plans. Even though charge-off notations can remain on your report for seven years, new notations that you have paid off these debts will also appear. In this case, current and future credit grantors would likely take a positive view of making such an effort to pay off old debts.

It pays to know what your credit report says about you, and it pays even more to know what all three of your credit reports say about you. Take a look at your 3 Bureau Online Credit Report PLUS a free score today and see your credit information from Experian, Equifax and Trans Union. And, you can see it all in seconds!