Debt management might sound like an oxymoron but it isn’t. Have you found yourself drowning in debt and unable to keep up with your bills? The professionals at Rock Credit Repair are experts in debt management and even better… debt negotiation. We can help you effectively reduce or eliminate your debt. Debt negotiation involves working with creditors to reduce your principal balance, minimize finance charges and late fees, or alter payment terms such as interest rates, monthly payments, or length of a loan.
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Have you recently decided to embark on the credit restoration journey? You may know by now that attempting to settle collections that you have on your credit report, isn’t always easy. Paying off debt may actually decrease your score. Shocking, right?!
Furthermore, a collection you pay off will still show on your credit report as a “paid collection,” which will continue to suppress your score. Unless you’re a victim of identity theft or fraud, the only way to increase your credit score is to get the account deleted from the credit report. Often you can do this in exchange for payment, also known as “pay for delete.”
We are able to utilize this strategy with all types of recent collections or small older collections. We cannot use this strategy for questionable older, more extensive collections, especially past the statute of limitations. This applies to debts that fell behind more than four years ago. In these circumstances you can try to validate the debt first instead of paying them.
How to Negotiate a Collection Down
As you know, all major collection companies, small or even big ones like ERC, Midland Credit, and Portfolio Recovery, will settle for much lower amounts. The rule of thumb is that the larger and older the collection, the bigger discount you may get on the settlement. It is not uncommon for Midland Credit to settle a $5,000 debt that is over four years old to be settled for $1,000, which is about 20% of the original amount. Likewise, a smaller deficit of $300 that fell behind last month does not leave that much room for negotiation. As a general rule of thumb, for debts around $1,000, start with a 40% offer, for debts over $2,000, start with a 30% offer and for debts over $4,000, start with a 20% offer.
Rock Credit Repair is based out of Round Rock, Texas, and helps those in the Dallas area with a wide variety of tax solutions. If you find yourself feeling overwhelmed paying off your debt, reach out to the consultants at Rock Credit Repair to help you fight for a better future regarding your financial situation! Call us today to get started or to have any questions addressed.
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