At some point in your life, you may have wondered what it means to have your medical bills referred to a collection agency. If this does happen, there are short-term and long-term consequences. Let’s unravel any mystery by explaining why this happens and what it means for your credit if it does, what to do if it happens, and how to recover your credit.
A credit score, like a shadow, follows us for life and is either helped or harmed by our choices. A healthy score requires good financial decisions over a long period of time and knowing your risk factors. Here’s what you need to know and how you can use that information to improve your credit.
Topics: Credit, Technology, old debt, debt collections, collection agency, get out of debt, how to get out of debt, student debt, unpaid debt, being debt free, debt settlement, How to boost credit score
The paradigm of customer preferences has shifted in recent years. It should be no surprise that these digital preferences in other industries, such as online shopping, would eventually carry over into others. Using digital channels to collect debts is by no means a novel idea, but it has presented a challenge for many businesses to implement. However, with the passage of Regulation F and constantly emerging technologies, the debt collection sector is undergoing a digital shift in its operations. Research shows that customers prefer digital engagement, making payments with the tap of a button, and self-service options that can be handled when the timing is convenient instead of phone calls they don’t have time to answer. The great thing about incorporating more technology into debt collection practices is that it is a win-win for customers and collectors alike. It permits more efficient workflows and grants more flexibility in communication. Digital debt collection uses text, email, and other digital means such as chatbots and applications to send outgoing and receiving incoming communication from consumers.
Times are changing, and so must collection techniques. With the Consumer Financial Protection Bureau’s “Regulation F” becoming effective December 1st, partners must adapt and optimize their practices to ensure more efficient debt recovery.
Creating debt is incredibly easy. The ability to make purchases without realistically having the money to afford them has made a very slippery slope out of many peoples’ financial situation. Derogatory marks on credit are a serious issue and once you are on that slippery slope there are many obstacles involved that keep you on it, causing you to go further into a place of financial unrest. Knowing how being in debt can affect your life is important in both preventing future slip-ups and motivating you to take action on your current unpaid debt.
The prospect of paying off your debt may be quite daunting. Between interest rates, minimum payments, and trying to budget, you are liable to get confused and overwhelmed. Becoming debt-free isn’t easy but it certainly is possible with the right plan that works for you.
When I was 14, I started my first job as a telemarketer for a photography company. That started decades of a career in sales and marketing. My longest stint was 20 years as the National Sales and Marketing Manager for a multi-billion-dollar manufacturing company, so you can imagine that the transition to understanding the mechanics of the debt collection industry was worlds away from what I was accustomed to. The difference is that I’m not selling products anymore, I’m selling a service. I am still learning this industry every day, but the thing that puzzles me most is the mysterious disappearing client. Let me explain.
It’s an unopened bill, an ignored phone call, a deleted voicemail. Sticking those bills in a drawer or straight into the trashcan doesn’t make the debt go away; in fact, doing so could actually be making you and your family sick.
Did you know that 61% of consumers have been negatively impacted by COVID-19? The greatest increase in bad debt began in March 2020, and as a result, the largest phase of third-party collections is estimated to begin in October of 2020, extending well into 2021.
Your credit score is important, and if you’re like many Americans, you may be faced with unpaid debts now or in the near future as a result of COVID-19.
Unpaid debt doesn’t require much of an explanation: it’s simply a debt that has not yet been paid. We previously discussed the dangers of unpaid debt and how it affects your credit, but what about your other options like debt settlement? Below, we will explore what debt settlement is, and how it can affect your credit score in the long-run.