hi everybody dave sullivan here for the creditguy tv this time we are going to go through collectionsand how to address them. you should have already received your annual credit report . com freecopy of your credit report. then tried to dispute something on line, and then addressedyour onetime 30 day late on open active accounts. now we are going to talk about how to handlecollections. and the best way to handle a
Free Annual Credit Report Without Credit Card, collection is to not have one. the collectioncompanies are required to send you a letter prior to filing that collection on your creditreport at least 30 days before filing it. so you have time to address it so as soonas you get a collection letter there is no reason not to address it at that time it isthe best way to handle it. everyone gets a
collection letter and you are not sure ifit is real or not so you toss it. so it finally got on your credit report now what do youdo. if it is very recent if you happen to catch it right when it came on within 6 monthsyou are going to want to pay that right away pay that off right away. and when you payit you should ask them to remove it. say look i did not get the notice or whatever the honestanswer is i did not know if it was real i will pay this for you but you have to removeit from my credit report. most of the time they will agree to remove the collection.they are not required by law to report the information. so in order to get it playedoff they will be very willing to remove it prior to paying the account now if you havealready paid it you cannot go back and ask
them to remove it because 9 times out of 10they will not even talk to you. so if you had a recent collection within 6 months goahead and pay that off as time goes by the date reported will sunset on your credit scoreand it will take a couple years before it has very little effect on your credit scoreand then fall off with in 7 to 10 years now let's say you had an old collection wellthe same rules apply you are going to call the collection company say i will pay thisoff if you remove this from my report it is very important that if you are going to makethe commitment to pay it off that you get something back if you pay an old collectionthat had not reported in a long time what will happen is that that old collection willcome up to today. so really if you pay an
old collection you are going to wind up hurtingyour credit score. and what happens is you make that collection more relevant to yourcredit score because it has a new reporting date. so you want to be very careful whenhandling collections it is a big mistake when people go to apply for a mortgage they saythat well i guess i need to pay off all these collections to get a mortgage and they killtheir score and they don't get the mortgage if there is one you don't recognize than thereis the verification of debt letter if you google verification of debt letter there shouldbe some resources on line for you but that is how you handle collections be very carefulon how you handle them it will affect your score greatly if you take an old one and makeit more relevant to today alright so you with
a little bit of me we are going to changethe credit industry
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