If you have a long overdue debt, most likely business owners will sell your account to debt collection agencies. When this happens, you have to settle your debt with them and not the main creditor. Having unpaid debts affects your credit score, making it more difficult to apply for loans and other kinds of credit. Paying off your debt is the main solution to make your credit score better.

If your account is already handled by a collection agency, here’s a simple guide on how to deal with it.

Verify the Information

Before contacting or even making any transaction with an agency, be sure that they are really the one handling your account. Sometimes, collection agencies resell accounts that are overdue for such a long time, making it difficult to trace and know where to pay. To know which commercial debt collection Brisbane agency is handling your account, you may ask for a report from credit reporting bureaus. The report contains full information about your debt such as the amount needed to be paid, the collection agency’s name and contact information.

Choose Your Payment Terms

If you’re planning to settle a debt, plan ahead on how much you want to pay for it. For example, you may choose to pay it in full to free you from credit. However, if you don’t have the budget for full payment, try negotiating with the collection agency to settle on an amount lesser than what was owed. Some collection agencies may also help you create a payment plan so you can efficiently pay your debt. In most cases, the older your debt is, the higher our chances of reaching into a settlement with an agency. It totally depends on the collection agency on how they deal with these matters.

Make an Offer

If you have decided to settle a bad debt, contact the collection agency first and let them know about your plan. Calling them is the fastest and most convenient way in processing your account. You may also visit their office if you want a more personal approach. If you’re not comfortable dealing with the agents face-to-face, you may send them a mail proposing your payment offer. Make sure to specify all the details in your message and always keep a copy of all the transactions and letters you send for documentation purposes.

Pay It

If the collection agency agrees with your proposal, the next and last thing to do is to pay the debt. It is always best to pay the debt through a money order or a wire transfer so ask the agency if they are receiving this kind of payment method. Keep copies of all the transaction you’ve made with them. Don’t forget to follow up the collection agency to see if your payment was already credited to your account.

Maintaining a good credit score is important so we could still avail other loans and credit when we need it the most. Make sure to settle debts no matter how old they are for good credit record.

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