Fighting Collection Agency Debt

I keep getting questions from readers wanting to know how to improve their credit scores after collections show up on their credit reports. Because lets face it, paying off the collections doesn't remove them from your credit report nor does it improve your score. So what do you do, Before I go into any depth here, I want to point something out: This is where I got my start. This is my home turf.

Working as an activist for consumer rights against debt collectors came later. Credit - and making it better - is where it all began. Anyway, back to the issue at hand. You have several options. This is a very "maybe" course of action, but if you're working on cleaning up your credit anyway, it's worth a shot. Now, the legality of disputing accurate information is a gray area.

I am not advising anyone to dispute accurate information on a credit report. If, however, you discover errors in the collection agency's trade line on your credit report - no matter how minor that error may be - disputing the information is an option. Heck no, but its how the game is played. The advantage you have here is that, once the debt is paid, the collection agency really has no incentive to respond to the credit bureau's inquiry. If they don't respond within 30 days, the trade line vanishes and your credit improves.

Your credit score (and when I say "credit score" I mean "FICO score" because no other credit score matters) is made up of a variety of different things. One such factor is your debt-to-limit ratio. Some also refer to this as your credit utilization ratio. Basically, this ratio is the balance of how much revolving (credit card and HELOC) debt you owe compared to your limits on those accounts.

The larger the gap, the better your credit score will be. 500. If you can afford to pay down some of your credit card or HELOC debt, that will help you quite a bit. Where did I get that number, Simple. I've spent years using my own credit as the guinea pig for my theories. In my experience, this is the ideal number.

This one won't work for everyone, but if you have an immediate family member with great credit and a credit card, its the way to go. Just ask your family member to add you on to his/her credit card account as an authorized user. The card information then appears on your credit report and - provided the primary card holder is an immediate family member - it factors into your scores.

You can become an authorized user on any account, but it won't help your scores unless that person is someone whose card the credit bureaus can be reasonably certain you would actually use, like that of a parent or spouse. Try to avoid secured credit cards if you can, and it should go without saying that you should pay all debts on time.

PayPal takes its platform security so seriously that it offers financial rewards to computer security experts who discover any breaches, flaws and vulnerabilities in PayPal's digital data defense system. Is PayPal Safer Than Banks and Credit Cards, In actuality, using PayPal may be even safer than using a check or your credit card or bank account to make a purchase.

With PayPal, your financial data is stored away in a single online "vault", whereas the same can't be said when transmitting credit card or bank data online on the internet. Also, paper checks can easily be compromised by fraudsters - all they need is a bank account or routing number to crack into a buyer's account and cause serious financial damage. PayPal offers buyers "payback" protection if their payments are made, and they don't receive the merchandise they ordered - giving buyers some peace of mind that they're money transmittal on PayPal is covered.

It's also a smart move to fund your PayPal account via credit card rather than bank account/debit card. That's because credit card companies are more likely to approve a payment dispute and refund your money than a bank/debit card provider. In general, PayPal sellers can count on an honest and safe user experience.

The same data security tools that PayPal uses to protect buyers also protect sellers. One key difference isn't necessarily a data privacy issue - it's a transaction and dispute issue. By and large, PayPal makes it easy for buyers to dispute transactions for a variety of reasons that are difficult for sellers to disprove.

For example, disputes over shipments that never arrived or arrived damaged are hard for sellers to win. Buyers can say the shipment never arrived, was stolen, or was damaged, or can even say they were unsatisfied with the product. PayPal seems disposed to favor the buyer over the seller in these cases, unless the seller has a solid defense on his or her behalf. Sellers can better protect themselves in disputes by only shipping goods to credible, verified destinations, and insisting on a proof of delivery message by delivery systems. UPS, Federal Express, Amazon and the U.S.