Collections……

Collection accounts can happen for so many reasons.  A collection is a debt that a creditor believes is owed to them and since it is uncollectable (they can’t get the client to pay them for a period of time) it is taken as a loss on profits.  This does not mean the client or consumer no longer owes the funds. 

Many collections are passed from one collection agency to another.  This is a huge problem since as each one reports it seperately the same debt could be placed on a credit report 10 times with 10 different creditors.  Each collection reported is considered a new negative and weighs heavily on the credit score even though it may be the same account again and again. 

It is not worth ruining your credit over a $50 co-pay. Even if you know you paid your doctor in cash on the day you visited his office for an exam.  If the office has no record (even at no fault of your own) that the payment has been made and a new collection comes up right before applying for a mortgage your score can drop 100 points. That $50 could wind up costing a consumer $100,000′s in interest over the life of the loan or even cause a denial for the loan entirely.

Make sure to follow up on any debt you might have, even if you are in the right, before it becomes a large financial problem.

“Great credit brings great opportunity”



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