Hi Ryan,
I wish I would have found your blog sooner. Last summer I made an arrangement with a debt collector over the phone. This arragement was for a XXXX-XXXXX account that was in charge off status for the past year or so. The debt collector said that if I paid $867, the account status would be changed on my credit report from ‘charge off’ to ‘paid in full’. Instead after I paid him, my credit report was updated to ‘paid charge off, $1400 written off’. My credit score only went up 4 points. I think you could understand how horrible this felt because I thought I was doing the right thing and I got screwed. My question is, now that I read some of your blog, is there anything I can do?
Thanks,
Will
Will
Unfortunately this happens a lot and there is very little you can do. The problem is that the deal was made over the phone -you can’t prove the scumbag collector made that offer. Trying to communicate with the collection agency now will be useless because they have already been paid. In this case, you can try to dispute the record with the credit reporting agencies and see what comes from it -you never know. Check out my dispute article here. Nonetheless, I recommend that you ‘write it off’ as well and begin rebuilding your credit. Start out by getting a credit card. Check out my recommendations.
Best of luck,
Ryan
One Response to “Reader Question: Screwed by debt collector re: charge off”
By Yolanda on Apr 1, 2008 | Reply
Hi Will, How to avoid a write off? The age of the account past due plays a huge part in how to avoid a write off situation. Settling a debt with a collection agency is not a good thing. You have to act quickly once the collection agency begin to get involved. Because it still will show on your credit report a percentage of the debt was a loss by that creditor. I work for Trans Union as a business analyst with knowledge of credit. My futuristic advise to anyone thinking about paying a collection. If it is not yet 60 days in collections and you can pay atleast 50%…DON’T DEAL WITH THE COLLECTION AGENCY! Thier persuasive tatics are BS. Go to the source which is your creditor depending on time frame. How old is the debt? The earlier the better is important. Because once the collection agency is involved it takes 60 days to hit your report if you are not making any effort to pay. You have time to work out a payment plan with the creditor. But if you discuss with the creditor a payment arrangement that is better than looking for a cheaper way out that will harm your credit anyways. Because dealing with the collection agencies will possibly add an additional record to your report if it is over 60 days. The account will show as a collection and an account with that creditor. You have to be mindful. Before settling the debt make an arrangement that pays the debt in full overtime….3-6 months perhaps…For example if you would have paid to your creditor $867 towords that $1400 with a $533 balance to pay overtime…Your scores would have definately increased more than 4 points even if you were late a few times in the past. Why? Because you paid over 75% of the balance. Which is a plus in the creditor eyes. Depending on your balance owed and ofcourse repayment abilities this works. Thanks for reading.