Once an account has been left unpaid long enough lenders may consider the account in default (more than 30 days), the lender may turn over the debt to a collections agency. Virtually any type of unpaid debt can be sent to collections and will remain on consumer credit reports for 7 years.
The Fair Debt Collection Practices Act (FDCPA) is a federal law requiring debt collectors adhere to certain procedures, before reporting consumer debt to credit bureaus for collections. Debt collectors must do the following before attempting to report your debt:
Debt collectors must satisfy the debtor contact requirements of the FDCPA before debts can be reported to credit bureaus. Besides the FDCPA procedures, collection agencies aren’t subject to a waiting period before reporting debtors to the credit bureaus.
Collections will be reported for 7 year once listed on your credit report. Having a collection on your report will damage your credit score and reduce the likelihood of you being approved for:
The Fair Credit Reporting Act (FCRA) permits consumers to dispute any collection account on their credit report. Disputing the collections won’t damage your credit score either. The following instances would have a higher likelihood of being disputed than legitimate debts:
Review your credit report regularly to ensure you dispute any incorrect items like collections as soon as possible. You can consult credit repair specialists Credit Sage to solve all your credit disputes on your behalf. Allow a team of credit repair specialists to get your credit score on track to its optimal potential now.
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