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Keep in mind that credit repair is a very shadowy industry in which most operators are not operating within the full scope of the law.
Make sure you are dealing with a reputable company. See our video on what to look for in a reputable provider.
Collection accounts and charge-offs debts
Collection accounts and charge-offs are debts that your original creditor has written off their books and thus has deducted as full value. Often they have added exorbitant fees and interest in far excess of the amount of the original debt. These accounts should be settled and you really do not need an expensive attorney or debt settlement company to settle these for you.
Typically, as a rule of thumb the smaller the account the closer to 100% the collection agency will want. Most recommend that you offer 30% for full deletion with the wiggle room of settling at 50% as a worst case scenario.
REMEMBER to get a FULL DELETION and ONLY a FULL DELETION or NOTHING.
DO NOT PAY A COLLECTION OFF OTHERWISE AS DOING SO WILL ACTUALLY HURT YOUR CREDIT AS IT WILL BE REPORTED AS IF IT HAPPENED IN THE CURRENT MONTH.
Collection agencies play word games where they say they will do an "UPDATE" of this account with the credit bureaus.
As mentioned, this will in effect actually hurt you more than leaving it alone and not paying it off.
As well, always get documentation and proof of what you are getting with respect to the terms of the settlement such as the badge id of the rep and other items such as a deletion letter in exchange BEFORE paying off the account.
If you are not getting anywhere then simply ask for the supervisor or hang up and call back to get another rep. Sometimes your will need to get a manager on the phone.
***This blog is for educational purposes only and as such you are advised to seek out and consult with your legal and tax advisors prior to engaging in any decision making affecting your business.
