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Collection agencies and credit reports

South Carolina residents who owe money to a collection agency might worry that this will affect their credit score, but there are a number of circumstances in which this is not the case. If an insurance company has paid a person's medical bill or it is within 180 days of the debt, this is not supposed to appear on the credit report.

Only debts that result from a contract or agreement can appear on the credit report. This means that if people have debts from parking fines or library fees, collection agencies are not permitted to put these on the credit report.

Some collection agencies offer a deal called a pay-for-delete agreement. This means that credit bureaus are supposed to remove the account from the report once the collection agency is paid, but experts advise caution with these types of deals. They are not always legitimate, and at minimum, consumers should get a written agreement from collection agencies.

If people owe money to collection agency Midland Credit Management, which is one of the largest, the account will not be reported if they begin paying within three months. People may be able to dispute the inclusion of any accounts that are mistakenly attributed to them. Collection agencies using newer credit score models will not affect a person's score.

Individuals who are struggling with debt might want to consult an attorney. Dealing with collection agencies can be complicated because it can be difficult to track which agencies have purchased which debts, and not all of them operate ethically. People may want to consider whether bankruptcy will be their best choice. For those who would like to keep some of their assets, a Chapter 13 bankruptcy, which allows them to work out a payment plan with creditors, might be an option.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
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Columbia, SC 29201

Phone: 803-764-1558
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