July 22nd, 2008
I Have To Wait Seven Years to Restore My Credit
One of the biggest myths involving credit repair is that once an account has gone into collections, you must wait seven years for it to be removed from your credit report. This is definitely inaccurate yet the bureaus WANT you to accept this as truth. The only reason they want you to believe this is because it keeps their workload down.
There are several levels to having an account go into collections: The first are collections within the organization that initially extended the credit. There are the calls from “Collections account managers” within the credit issuing company. They normally have not reported your delinquency if the creditors are still calling. The company is trying to keep from having to report you to the credit bureaus and often tries to encourage you to make a payment with them on the p one either immediately or tin the immediate future with a post dated check.
The next type of collection occurs after the issuing company has been unsuccessful in the first step of collections as discussed above. This is when they decide that the account is a loss to them financially. All companies have what’s called “Bad Debt” allowances in their accounting and this is where uncollectible accounts are placed. However, the company is unwilling to take a complete loss on this account and sell it to any agency that is a little better at scaring people into paying what they owe.
The initial point is that once an account is in collections, if handled properly it can almost be more beneficial to you. I’m not telling you to not pay what you owe, but paying a collections account off does NOT remove it from your credit nor does it raise your score. This will only happen if the correct steps are taken.
Written by Mark Redd
Email: info@nocreditnolife.com
http://www.nocreditnolife.blogspot.com
