Should I Pay a Collection That Doesn't Show Up on My Credit?

The Bankrate website reports that as of 2010, lenders report over 1 billion pieces of information to the credit bureaus each day. With all of that information floating around, mistakes will happen. Whether the credit bureau made a mistake, or the collection agency simply did not report the debt, you should still pay. Nevertheless, before you do, take the necessary steps to protect yourself.

How Collection Accounts Happen

When you make purchases with a credit card or carry a debt, the lender will send you a monthly bill. If you do not make a payment toward the credit card for several months, the lender will close the account. Typically, the lender will hand your debt over to a collection agency. The collection agency will then actively try to collect the debt. The agency will send you a written statement about your debt with instructions on payment.

Verify the Debt

If you receive a questionable letter from a collection agency, do not feel the debt belongs to you or do not agree with the total due, you can request that the collection agency verify the debt. Submit any request for verification to the collection agency in writing, and send the letter by certified mail. Keep a copy of any dispute you send. Bankrate reports that you have 30 days to request the collection agency to verify the debt. If the collection agency proves you owe the debt, it can continue to collect. If it cannot, it must stop contacting you.

Pay the Debt

You can try to settle with the collection agency. Many collection agencies will accept a payment for a fraction of your total amount owed. You can contact the collection agency by phone to work out a settlement agreement. Get any agreement in writing before sending the collection agency any payment. You also can request that the collection agency not list the collection on your credit report, or that it list the collection as "paid in full." The collection agency has no obligation to do so, but if it agrees, get it in writing before you pay.

Tips

Check your credit report 30 to 60 days after you pay the collection account. You can pull a free copy of your credit reports from TransUnion, Equifax and Experian once per year through Annual Credit Report. If the collection agency listed the account after agreeing not to report, you can dispute the file with the credit bureaus. When disputing the file, include copies of any written correspondence you have between yourself and the collection agency.