How to Report to Collection Agencies

Dealing with a collection agency can be extraordinarily stressful. In most situations, they have the legal power to sue for collection of debts, confiscate money from checking accounts and garnish wages. Contacting them directly and making all agreements in writing limits their ability to take adverse action on your assets even if you are not able to fully pay the debt.

Instructions

1

Make a written record of all communications with debt collectors. If you receive phone calls, either record them or make small notes regarding the contents of the call. Do not make agreements with debt collection agents over the phone. Insist that they put all offers in writing to be mailed to you.

2

Educate yourself on your rights by reading the Fair Debt Collection Practices Act brochure, which is accessible through the "Resources" links below. If the collection company violates sections of this act, you may not be required to pay the debt. For example, a phone call from a collector falsely claiming that you can be taken to criminal court for unpaid debts is against the law, and will void their attempt to collect on your debt.

3

Attempt to settle or pay the debt by negotiating with a collection agent. Debt collectors purchase debts from the original creditors for much less than the value of the outstanding loan. Try to negotiate a lower price for settlement.

4

Ensure that the debt collector agrees to report the updated status of the loan to the credit reporting agencies. If you settle the debt with them, they may report it as settled to the credit bureaus. In some cases, you may be able to settle a debt and convince the collector to report it as paid in full as part of your negotiation.

5

Follow up with your credit report to make sure that the collector sent in the information. If the account is not updated on your report promptly, file a dispute with the credit bureau along with copies of relevant documentation demonstrating your agreements with the collector.