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Sometimes, unpaid bills get sent to collections, which can feel overwhelming.
But the process isnt as mysteriousor as hopelessas it seems.
With the right steps, you’re able to handle collections and evenprotect your credit along the way.
Heres what you better know.
What Does It Mean When a Bill Goes to Collections?
Instead, theyll either hire a collection agency to chase the payment or sell the debt outright to them.
Thats when youll start hearing from the collection agency instead of the original company.
The collection agencys job is to get you to pay.
They might call you, send letters, or offer a settlement where you pay less than you owe.
This process is stressful for many people, but understanding whats happening can help you take control.
How Long Does It Take for a Bill to Go to Collections?
Generally, companies wait somewhere between 60 and 180 days before they send your unpaid bill to collections.
The exact timeline depends on the jot down of debt and the policies of the company you owe.
For example, medical bills and credit cards might have different timelines.
The key takeaway here?
The sooner you act on a missed payment, the easier it is to avoid collections altogether.
What Happens to Your Credit When a Bill Goes to Collections?
Once a bill lands in collections, its probably going to show up on your credit report.
And unfortunately, thats not good for your credit score.
Collection accounts damage your payment history, which is the biggest factor in your credit score.
A fresh collection account can cause a significant drop in your score.
What Should You Do If Your Bill Goes to Collections?
Ignoring the situation wont make it go away.
In fact, it can make things worse.
Instead, take these steps to get ahead of it.
First, confirm whether the debt is accurate.
If its correct, decide how you want to handle it.
This protects you in case theres a misunderstanding later.
Can You Remove Collections from Your Credit Report?
Its possible to get a collection account removed, but it depends on the situation.
Just know theyre not required to do this, so its not always an option.
If the collection account is there by mistake, you might dispute it with the credit bureaus.
If your dispute is successful, the account will be removed.
Otherwise, collection accounts drop off your credit report automatically after seven years.
Heres how to stay on track:
FAQ
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