How to Pay a Collection Agency Before It Affects Your Credit

Having your account sent to a collections department doesn't immediately affect your credit history. Collection departments typically send bill payment requests and telephone debtors several times before pursuing legal action or reporting the account to the credit bureaus. Consequences of being sued by a creditor or debt collector include a possible judgment which can hurt your FICO rating. Protect your credit by paying collection agencies before they contract the bureaus.

Instructions

1

Read letters and respond to voice messages. Never assume that collection agencies are making empty threats and will never pursue legal action. Communicate with the agency that handles your account to resolve the debt and keep your credit in good condition.

2

Mail a request and ask for confirmation. A debt collector may send a bill request letter for a mysterious debt. Don't hastily send a payment. Compose a letter and assert that you do not recall the debt. Request written validation as proof that you're under obligation to pay the funds.

3

Pay the collection balance in full to quickly rectify the debt and protect your credit. Forward payment to the collection agency only after you receive evidence that you owe the past due balance. Record the check number and make a copy of the canceled check or money order used to pay the balance.

4

Propose an installment schedule to lower the balance over time. Speak with a representative to explain your financial situation and then volunteer to send a specific dollar amount weekly or monthly to resolve the outstanding balance.