How Does a Bill Going to Collections Affect Your Credit Report?

Debt collection implies that a third party is trying to retrieve payment for your debts on behalf of your creditor. If you wonder whether a bill going to collections affects credit, it does.

Learning that you have debts going into collections can add anxiety and stress to your life. But you don't have to deal with this situation on your own. DoNotPay is here to help. We can mail a pay-to-delete negation letter on your behalf. This is a letter requesting a settlement that allows you to pay part of the debt. In exchange, all of the negative items are removed from your account. We can also send a credit dispute letter for inaccurate reports or illegitimate debts going into collections.

What Is a Debt In Collection?

A debt collection means the original creditor has sent an agency or a third person to collect the debt from you. Typically, lenders would attempt to collect the debts themselves before writing them off and passing them to third parties. Some of the debts that can be passed on to a debt collection agency include:

1. Credit card debt
2. Mortgages
3. Auto loans
4. Student loans

How Long Does It Take Before a Debt Is Sent to Collections?

Late accounts are placed in collection status for as little as 30 days or as long as 180 days once you miss a payment for the first time. At this point, the debt is recorded as charged-off on your credit. Charged-off accounts imply the lender doesn't expect to collect on them. Charged-off accounts typically show up on your credit report as closed or transferred accounts with no balance owed. Charge-offs typically stay on your credit report for seven years. However, their impact on your credit decreases with time.

How Can a Debt Collection Impact My Credit?

Credit bureaus categorize late payments per the number of due days, such as 30 days late, 60 days late, and 120 days late. The longer the payment is late, the more it hurts your credit score. In a nutshell, debt collection is a serious negative item to appear on your credit card. It means the original creditor has already opted to write off the debt completely and can severely impact your credit scores. It is advisable that you work hard to get it before the debt is sent to collection.

About Your Debt Collections Rights

The Fair Debt Collection Practices Act puts several limits on what a debt collector can do or say. The debt collector is mandated to send you a written notice at least five days before they contact you for the first time. The notice states the money you owe on the debt, the name of the collector, and the steps to take to resolve the issue. The following are the other debt collection rights under FDCPA:

• It is your right to dispute the debt within 30 days if you think it is illegitimate.
• Once you dispute the debt, the collector has to send a written verification before they contact you again to collect payment.
• Debt collectors should not contact you before 8 am or after 9 pm unless you allow them to call you.
• Debt collectors are forbidden from threatening you either with physical violence or the use of obscene language.
• It is your right to be represented by an attorney. Where a lawyer represents you, the debt collector must communicate with them and not you personally.

The Steps to Remove Debt Collections From Your Credit Report On Your Own

If you want to remove a collection account earlier or you believe it is an error, take the following steps:

Remove Collections Accounts With the Help of DoNotPay

The DIY methods to remove a collection from your report are tedious and time-consuming. DoNotPay can help you clean your credit report in 3 easy steps:

1. Search Clean Credit Report on DoNotPay.

    

2. Prepare a recent copy of your credit report that you can use as reference.

    

3. Let us guide you through the 4 potential options:

• 1. If you've already paid off your debt, we'll help you file a Goodwill Removal Request to get it removed.

      

  2. If you notice any errors in your report (we have a list of common errors you can use!), we'll help you file a credit dispute to the creditor or major credit bureaus.

      

  3. If there are no errors, we'll check if you're still eligible to file a debt validation request. If they can't validate your debt, they're required to remove it from your report and they can't collect it!

      

  4. Lastly, if none of the above options work, we'll help you file a pay-to-delete negotiation letter. You can customize the amount you are willing to pay in exchange for getting the item removed.

Let DoNotPay Help You Out

Aside from cleaning your credit reports, DoNotPay can also help you with other services such as:

• How to Cancel Subscriptions
• Financial Aid Appeal Letter
• Help With Bills

Debt collection is a federally regulated process with rights that collection agencies must honor. If you have a collection from a debt that is not yours, you have a right to dispute it and have it removed. DoNotPay can help. We will send a dispute letter to the creditor, asking them to remove the collection within 30 days. Contact us today to learn more about how a bill going to collections can affect your credit score.