Understanding Collections
7 min read
How accounts end up in collections
When an original creditor gives up on collecting a debt, they may assign or sell it to a collection agency. The collection then appears as a separate account on your report and can significantly impact your score.
Your right to validation
Under the FDCPA, you can request that a collector validate the debt — proving the amount is correct and that they have the right to collect it. A debt validation letter is most effective within 30 days of the collector's first contact.
Review before you act
Check the balance, dates, and original creditor for accuracy. If something looks wrong or unverifiable, you have the right to dispute it with the bureaus. If the debt is accurate, learn about pay-for-delete negotiations and how paid vs. unpaid collections are treated by newer scoring models.
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