Creditors are any company that has given you a service on the agreement that you will pay. Sometimes you can’t pay them. Either an accident or loss of job, sometimes it just isn’t possible. Creditors then have the right to report your non payment to the credit bureaus and request your payment from you.

This is where they can get nasty. Depending on how late you are are how much you owe, they will sell your debt to a collection agency or file a judgment against you in a court of law. Usually the whole time they are charging additional fees. Don’t know why they think if you can’t pay the initial debt, you would be able to pay additional debt.

You need to keep an eye out for the bad collection practices and what it can do to your credit. Here is a list of things to watch out for:

• Reporting Your Negative Account Twice – The original creditor will report your debt with them and the collection agency or courthouse will report it again. So your credit is getting dinged twice as hard for just one account. This is wrong and one of these accounts should be removed.
• Updating Your Old Account – The more recent a negative listing, the more damaging it is to your credit score. Creditors will keep updating your closed or inactive account to show a recent late payment. Make sure when you pay your debt, that the account is not being updated with a late payment.
• Keeping Your Account On Your Credit Report – By law, old accounts on your credit report should only stay on there for up to 7 years. Creditors will resell your account to a new collection agency to restart the 7 year clock and keep your negative account listed indefinitely.

Creditors, collection agencies, lawyers can all be ruthless. They don’t care if you are broke, can’t find a job, or in the hospital. They want their money and will do anything to get it. Stay on top of your credit reports and know what they are doing to them. Restore your credit, pay your bills on time, and I hope none of you have to worry about bad collection practices.