Do Collection Agencies Have Access to Credit Bureaus?

Not all debts incurred by debtors are collected by the people to whom they owe money. Often, creditors hire collection agencies or sell their debts to collection agencies, as collection agencies are more skilled at collecting on debts than creditors. Because collection agencies have a legitimate business need to access a credit report, they can access this report, as well as report the status of debts to credit bureaus.

Acessing Credit Reports

As long as a collection agency pays the money required to access a credit report to the credit bureau that holds it, the collection agency can access the report of any person from whom it is seeking to collect money. Although credit reports are not public information, they are legally available to someone who has a legitimate business interest in knowing a person's credit history. This includes debt collectors.

Effect on Credit Score

It is a common misconception that a collection agency checking a person's credit report will cause his credit score to decline. The only time a credit check can cause a person's score to go down is if the party doing the checking is a lender who is considering an individual's request for credit. Because the individual is not looking to take out more credit, a check by a debt collector will not hurt his score.

Reporting Debts

Another way in which a collection agency has access to a credit bureau is through the reporting of the status of a debt. If a debt is delinquent, a collection agency may report this delinquency to a credit reporting bureau as a means to motivate the debtor to make good on the debt. This is because the presence of a late debt payment on a credit report will cause a person's credit score to decline.

Considerations

While a collection agency has access to the credit reports of debtors for whom it is collecting debt and whose debt it is considering purchasing, it cannot access the reports of a person for whom it does not have a legitimate business interest. In addition, agencies cannot report false information to credit bureaus that causes a person's credit score to decline, particularly if it is used as leverage to get the person to pay off a debt.