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How Do Collection Accounts Affect You and Your Credit?

Updated: Mar 4

"Some debts are fun when you are acquiring them, but none are fun when you set about retiring them."



How Collections End Up On Your Credit Report?


Your credit report contains information about your credit accounts, e.g. credit cards, loans, etc. Most, if not all, of your creditors, send monthly updates about your payment status to your credit report.


When an account is sent to a collection agency, either the original creditor or the collector updates the account on your credit report with a "collection" status. The creditor doesn't have to tell you that your account is being sent to collections. However, the debt collector does have to notify you that they are collecting the debt before they can take any action. A collection account may appear on one or all three of your credit reports depending on which credit bureaus the debt collector has an arrangement with.


What Does It Mean For Your Credit?


A debt collection is one of the worst types of credit report accounts. A collection account shows that you have become seriously delinquent on an account.


Your credit score will drop if a collection appears on your report. You may be denied for credit cards and loans in the future, especially if the collection is recent or remains unpaid or both.


Accurate debt collection accounts can stay on your credit report for up to six years. If your credit report contains a collection that doesn't belong to you, you can have it removed by disputing it with the credit bureau.


You can lessen the effects of a collection on your credit score by paying it off. As time passes, the collection account will affect your credit less. Continuing to pay all your other bills on time will also help your credit score recover from a debt collection.


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Miss Lee at +6016 700 2629 or email to sales@brixandvinze.com"


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