Bad credit repair strategy doesn’t make sense all the time. Take a guy named Eli Rodriquez, for instance. He thought he did “right” when he paid off old collection accounts. But then, his credit scores dropped 90 points. What happened to Eli seems common and costly. Before you pay off a debt collector, you might consider a little due diligence first.
Eli paid off old collections, watched in horror as his scores dropped & then contacted me for help…and an explanation. At that point, I told Eli he cleared his conscience by paying off debts he said were his from many years ago. How many years, you ask? I asked Eli the same question. He claimed he could prove the bills were from 10 years back…at least 10 years he swore.
Certainly, I hear about people all the time whose situation compares to Eli’s. They pay off a collection…or 2…maybe 3 or more. They believe they’re doing what’s right. In one sense, they are doing what’s right. They’re paying off legitimate bad debt. Unfortunately, they’re paying a debt collector, not the original creditor. Further, people pay debt collectors what the debt collector demands. There’s no verification and validation of the debt. It’s as if I (a debt collector) show up at your front door, demanding your money. Without questioning why I’m asking you for money or demanding I prove you owe money or that I have legal cause to collect or even that the amount I’m demanding is correct, you hand me your money. You wouldn’t hand me your money like that, would you?
No, of course you wouldn’t hand me your money without due diligence. Of course, the debt collector wooed Eli, telling him his credit would “sparkle.” Suddenly, the debt collector told Eli, his credit scores would jump and he no longer would be rejected on any credit app. At the time, this sounded good to Eli and his wife. However, that was a bunch of hot air, not founded on Fair Credit Reporting Act. (more…)