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How Do I Deal with Debt Collectors?

Dear Experian,

How should I deal with debt collectors? I have seen on other blogs that once the third party debt collector contacts you it starts the seven-year period all over again. In the same blog, it said that “payment” of any kind starts the process again. Which is it?

– MCH

Dear MCH,

If you are being contacted by debt collectors and you are ready to begin taking care of past due debts, don’t be afraid to do so. Just be sure to keep a record of who you speak with and the agreements you make, and always request a receipt for any payment made.

Debt Collection Myths

The amount of time a debt can remain on your report cannot be extended because a collection agency contacts you, nor can it be extended because a payment is made.

Collection accounts remain on the credit report for seven years from the original delinquency date of the debt, or the date of the first missed payment that led up to the collection status. That date is reported to the collection agency by the original creditor. Federal law requires that the collection agency report the date to the credit bureaus, and it cannot be changed.

Paid Collections

Although a paid collection account will not be removed immediately from your credit report, a paid off collection will usually be viewed by lenders as at least a little better than an unpaid one.

Even though a paid collection may remain in your credit report, the newest credit scoring systems, now beginning to be adopted by lenders, may exclude them from the score calculation. This is especially true if you pay off a medical collection.

So, if you have a collection account on your report, paying it off could help your credit scores right away.
Furthermore, leaving a debt unpaid could prompt the creditor to take you to court in order to collect the debt. If a judgment is filed against you, it will become a matter of public record, and could end up on your credit report under the Public Records section. Judgments remain on your credit report for seven years from the date they are filed, so it may be in your best interest to pay off any debts owed before reaching that point.

Thanks for asking,
The “Ask Experian” Team

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