When you are involved in your own credit repair, it can be confusing to decide how to lay out your plan for debt repayment - especially when you start getting calls from aggressive debt collectors.
Consumer credit repair is something that can be done but it does take a plan, as well as time and effort to follow through on the task necessary.
Dealing With Debt Payoffs Setting out to pay off your balances and eliminate debts requires a plan of action.
You must start by ordering your credit report and reviewing the details it contains.
Most importantly, you need to make a list of your creditors, their contact information, your account numbers, and the amount you still owe on the account.
The next step involves your own finances and figuring out how much money you can afford to pay off certain debts.
You will likely only be able to cover a few debts at a time so you must prioritize which debts are to be paid off and when.
Develop a timeline for yourself so you are more likely to stay on track.
You'll then need to contact the appropriate party to discuss debt negotiations and pay off.
This is where is can be confusing.
Since most consumers will feel their repayment obligation lies with the original creditor, they may make a mistake in paying the wrong person.
It is important to get the most up to date and accurate information concerning your debts and your credit report and monthly statements will be what you need to rely on for this information.
Who to Pay? When an original creditor finds they can no longer hope to collect on a debt, they will often enlist the services of a debt collector to work their magic.
You may feel it is more important to get the payment to the original creditor but it may not be the right choice.
Debt collectors do work as third-party help but in some cases, the collection agency actually buys the debt from creditor for a smaller fee than owed.
The debt collector then sets their sites on getting more money back from you than they paid for the actual debt from the creditor.
This is one reason that debt collectors tend to be really aggressive about their efforts to get money.
Paying the creditor is your first priority as long as the debt has not been sold.
You will be able to tell on your credit report by the status of your account shown.
If a creditor sells the debt, they will report back to the credit reporting agencies that the debt was charged off.
The debt collection agency information will also now appear on your credit report as being the owner of the debt.
When you make the payment, you should pay only the company who is holding the debt to ensure it is satisfied and reported correctly.
Your credit report and score will already take a hit from the debt being charged off to a third party by the original creditor so you need to work hard to ensure you are not causing it any more damage.
Follow Up Pays Off It is not enough to send in a payment and consider the case closed.
You will need to reorder your credit reports a few months after final payment is made to be sure that your accounts are accurately reported and you have officially eliminated the debt satisfactorily.
Many people fail to take the final steps to check back in with their creditors and collectors and just assume things have been handled properly.
It is the consumers responsibility to make sure things are as they should be so credit reports and scores will be able to benefit from the debt elimination.
If things are not as they should be, start writing letters and making contact with the creditor or collector to request the change.
If nothing happens, you can dispute the information listed on your credit report with the credit reporting bureaus to make sure you have cleared your credit as effectively as possible.