Your credit rating is, in many ways, what makes you a citizen in the eyes of the creditors. Without good credit, you will find it nearly impossible to reestablish your life. If you are considering credit card negotiation because you can’t pay your bills, talk to your creditor about protecting your credit rating. It is very unlikely you will be able to avoid a black mark on your credit score, but there are ways to insulate the blow to your “good standing” as a creditor and citizen. A good place to start is through the collection agency.
I’ve paid off the collection agency, now what?
Contact your original lender or debtor. If you paid off a delinquent debt through a creditor, the onus is on you to inform your lender. Creditors are required to keep your credit record up to date, but they can miss. This spells prolonged debt negotiation and bad credit for you.
Can the collection agency influence my original creditor into changing the status on my credit report?
It is unlikely the agency or the creditor will go along with this eagerly. However, both the creditor and collection agency want you to settle your debts. It may be mutually advantageous for everyone in the credit negotiation to give you a better credit mark if they get paid off in full. Your debt becomes your bargaining chip once negotiations have started.
There is no such thing as a positive status on your credit report. Even if a collection agency has reported that you ‘paid in full,’ this is still a black mark on your credit. Do your best to have the debt eliminated from your credit report. This will return you to good standing as a credit citizen more quickly.