Tips On Negotiating A Debt With A Creditor
Thinking about negotiating a debt with a creditor? Here are a few tips to help you get the most of your negotiation.
Make sure the debt is valid: Before you contact the creditor, make sure the debt is accurate and verifiable. You are protected by the Fair Credit Reporting Act, ensuring that you’re not held liable for accounts that are inaccurate, unverifiable, misleading, or outdated.
Ask quality questions: Ask the creditor when and how they contacted you regarding the debt, and whether or not they have the correct address, name, and information on file. Be sure to ask what the creditor is willing to do to help you reach your credit objective.
Have a budget in mind: Know your budget limitations, and start with a reasonable offer. Be aware that your first offer may not be accepted.
Have a clear objective for the negotiation: If you’re looking to improve your credit health, it’s important that you have a clear objective in mind. For example, if you’re negotiating a medical collection, but sure the creditor provides you with the information needed to remove that item from the credit report upon the execution of a negotiation. Remember, some non-medical debt collectors may be unwilling to remove derogatory paid accounts from a credit report, so take that into consideration during your negotiation.
A few things to be aware of during a negotiation:
By starting a negotiation, you may be resetting the Statute of Limitations, essentially resetting the seven-year clock for how long that account can stay on your credit report.
Some debt collectors can be aggressive. Research your rights per the FDCPA, and file a complaint with the CFPB against debt collectors that are violating your rights.
Most debt collectors will give a specific window of time to execute a negotiation. If that time frame expires, it could lead to escalated action from the debt collector.
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