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Should You Pay Collection Agency or Original Lender

Dear Experian,

I made payment arrangements to pay a debt to the original credit card company; however, a third party collection agency is now contacting me for payment on the same account. Who should I be making payments to?


Dear ALT,

You should always pay the legal debt owner, or organization responsible for the debt. That means your payment should go to the collection agency if it now owns the debt.

Collection agencies may collect the debt on behalf of the lender, or they may purchase the debt from the lender. In either instance, the collection agency is responsible for receiving any payment you make toward the debt, and the original account holder is no longer associated with the debt.

On your credit report, the original account entry will have a status of charged off. That is considered a final status for the account and shows it is no longer active. The original account should also show that it has been transferred or sold.

If the collection agency reports to a credit reporting agency, a new collection account will be added to your history. It may also show from whom the account was transferred or purchased. The collection account is now the active account for the debt. Showing both the original account and subsequent collection or collection accounts provides a complete history of the debt.

Thanks for asking.
– The “Ask Experian” team

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