One of the biggest reasons why people don’t try to fight their credit score is because of all of the different terms involved. Debts change hands all the time, so it’s hard to step back and realize exactly who owns your debt and how they’re supposed to take care of it. The trouble right now is that you’re going to have to really make sure that you’re thinking about your debt from start to finish — which means thinking about the type of collection that you’re dealing with.
For example, you might be curious about the differences between original creditors and collection agencies. The collection agency is the one that comes after the fact, while the original creditor is actually the one that you made the agreement to. If you got a cell phone from T-Mobile and you fail to make your monthly phone bill, the company is going to try to collect the debt internally. When they realize that you will not pay it, they will charge off the account by selling the debt to a collection agency. The company gets to make some money off the account, but the collection agency is the one that really scores big. Most people will not try to make any type of deal with a collection agency, just trying to pay whatever the CA tells them to.
No matter if you’re dealing with an original creditor or a collection agency, you need to make sure that you know your rights. You need to make absolutely sure that you’re not just doing whatever the collection agency wants you to do. They might try to tell you that you don’t have 30 days to validate the debt — or to get you to claim the debt on the phone. Never admit guilt to a debt collector because everything that you say is going to be recorded. Mind you that if you try to record them, they will hang up on you. It’s really dirty if you ask us, but it is what it is.
Your original creditor is generally going to want to do everything that they possibly can to avoid trying to sell the debt away. They want to keep you as a customer so if you really can make a payment plan with them, we suggest doing that. However, you also have to look at statute of limitations when it comes to all of your debts.
Generally speaking, original creditors aren’t going to mess with you on old debts — they’ve already sold it, and your debt has already passed through a lot of different hands. So you want to always make sure that you think about the status of your debt to begin with. There might be a point where you just need to abandon the debt rather than even give the collection agency the time of day. If a debt is outside the statue of limitations, they really don’t have any right to collect it from you anyway.
Now that you know more about the differences between original creditors and collection agencies, you’ll be able to make better decisions in the long run!