If I Pay One Debt Collector, Do I Have to Pay the Others?

If you have several collection accounts — and your phone has been blessedly silent — what happens when you settle one? Will the other collection agencies see that you settled and redouble their efforts to collect from you?

A couple of readers have recently reached out to us to ask what collectors see on their credit reports. “Camping mom” asked if paying one collector would cause others to come after her. Another commenter wondered if checking his credit gives creditors access to his current credit information.

We asked Michael Bovee, a Credit.com contributor and founder of the Consumer Recovery Network, and he said our readers’ fears that collectors are keeping an eye on them are valid. “Debt collectors of every type have the ability to monitor credit report activity and set alerts that meet specific criteria,” he said. “One thing collectors will often react to is when they see credit reporting alerts showing other past-due accounts being resolved. This shows the debt collector you have a willingness and ability to pay.”

Opening the Floodgates

It’s not unusual to start receiving letters and phone calls from other collectors when you pay off or settle one account, he said. Another possible trigger is applying for new credit, which can suggest to collectors that your financial situation may be improving.

But waking these seemingly sleeping giants may not be as bad as it sounds, Bovee said. “When I am helping someone to strategize how they will resolve past debts, I am often looking at ways to tackle multiple accounts at the same time, or over a short period of time,” he said. “If our goal is to resolve more than one debt, it can help to leverage the fact that there is only so much money available to resolve multiple accounts.”

What about checking your own credit reports or scores online — could that result in a creditor or collector deciding to take another look at your credit? Not likely. “Checking your own report results in a soft inquiry, which is not shared with lenders or others, so (it) would not trigger collection calls,” said Rod Griffin, director of public education with Experian, in an email. However, “existing creditors may check the individual’s report as part of an ongoing business relationship, so in this case the creditor may already have seen the report,” he says.

If you are concerned about your credit and debt, you would do well to monitor your credit reports and credit scores. You are entitled to a free annual credit report from each of the three major credit reporting agencies. The reports can look daunting, but it’s important to make sure the information is accurate (here’s a cheat sheet for understanding it) and to dispute information that is either incorrect or outdated. The information in your credit reports is used in the formulas that determine your credit scores, so errors can result in a lower credit score than you might have otherwise.

There are hundreds of credit-scoring models, so if you are looking to improve your credit standing, it’s important to compare the same model month to month. There are many places where you can get your credit scores for free, including Credit.com, which offers two free credit scores, updated every 14 days. Checking your own score will not hurt it. An unexplained change could alert you that something is amiss so that you can address it quickly. And if you are working to improve your score, regular reviews can keep you on the right track.