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The phone rings. You wonder, “Is it a debt collector?” You decide not to answer it because you don’t want to face another troubling call.
Has this ever happened to you?
We take on debt when we need to, and we try to pay it off as we agreed. But there are times when extenuating circumstances keep us from meeting our obligations. When that happens, the businesses we’ve purchased from take action, perhaps by first putting us on their internal accounts receivable list and then ultimately sending us to a third-party debt collection company.
Having a debt in collections can dramatically impact your credit. The collection item appears on your credit report and drags down your credit score, which can make you a less attractive borrowing candidate for lenders.
One of the most important things to know is: DON’T ignore their calls. They won’t go away and the longer you avoid the calls, the more work you’ll have to do on your credit to regain lost ground.
Draw strength from the fact that this is a temporary situation and deal with it straight on. The sooner you deal with it, the faster you’ll end it.
The next thing to do is determine whether or not you should dispute the debt collection item. There are some circumstances that call for a dispute:
1. If the debt doesn’t belong to you.
2. If you’ve already paid the bill.
3. If you are not sure the amount they are trying to collect is correct, or you think it may be too old.
If none of these are true, and you are indeed responsible for the debt, then the best thing you can do is pay off the debt. Your credit is impacted regardless of whether it’s a small amount or a large amount of outstanding debt, so if you are on a budget then pay off the small amounts and work out a payment plan on the larger amounts.
When you get a call from the debt collector, follow these tips to help you work with them on the phone:
Debt collection isn’t a pleasant experience but it does happen. When it does, use these tips to help navigate the emotional situation and take charge of your credit.
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