In case you have been neglecting to pay your bills, you should know it would be negatively impacting your credit score in a considerable way as your credit report will probably show that you have accounts in collections. This happens when you have failed to pay any bills on time and the company writes this off as a debt and a loss. The company will then transfer this debt to a collection agency that will try and collect this debt from you. This unpaid debt will reflect on your credit report as a “collection”.
Impact On Credit Score
Once your account has been marked under collections, the amount that it will impact your credit score will be determined by how high your credit score was when the collection was reported and by how much you owe. The impact on your credit score will also depend on the type of bill owed, such as medical or non-medical. Furthermore, this will impact the availability of loans or credit cards to you. In case you have unpaid bills on your credit report, there is a high chance that you may be refused loans or credit cards.
How To Manage
Now you can try a little credit repair on your own. To do this, first check if there are any incorrect entries or inaccuracies showing on your credit report. Inaccurate information, if any, must be reported at once as it is impacting your credit score.
Next, you can try negotiating with the collection companies so that the debts are removed from your credit report, once you’ve paid off the debt. In most cases, this won’t remove collections from your report, so be very careful and have an understanding if you do go this route. Collection companies are not required to remove the collection from your report once you’ve paid it off – therefore you will STILL HAVE A COLLECTION reporting on your credit report in the negative/derogatory section (although it will show as a paid collection). Do note that with time, your debts will not have that much impact on your credit score. But you still need to pay off your bills and your debts.
Keep In Mind…
If you have good credit, you can apply for an FHA loan, mortgage on your home and so on. But in case your credit report does show collections, whether they are paid or not, you should opt for credit repair immediately. Credit Law Solutions is an experienced credit restoration company that is skilled in removing all types of inaccuracies and collections from credit reports. Thus in case you find inaccurate information or collections on your report, take action right away!