Welcome to RegulationRoom Aaron Racicot, and thank you for your comments. CFPB is very interested in examples of good practices by credit unions. Could you share more information about how they help out their members?
Thank you. Please do not misunderstand me, however; I was talking about the general perception of debt in the eyes of consumers.
(I have no personal experiences with debt to speak of, only my experiences working with victims of identity theft who have fraudulent debts; which is a horse of a different color.)
Consumers are not educated about how debt collection and revival works. The issue in the end isn't the mechanics, or if they can request the debt not be reported.
The issue is that, the way things stand now, it is not clear how repaying a debt will improve their score. It is not clear that they can ask for the collector not to report the debt payment if the debt is older than seven years. Consumers are confused and have these inaccurate perceptions because things are not clear.
Again, it is the perception which concerns me - it would benefit both creditors and consumers if it was plain and clear, in language the average consumer could understand, that paying off a debt is a good thing.
A debt that is paid in full doesn't improve a credit score at all. A debt that is settled for less or paid in full is the exact same. Once the damage is done to a credit score, the damage will remain. The only slight (very small) improvement on a credit score is when a bad debt was a credit card account and had over 100% utilization. Once the utilization goes down below 100% (and that occurs when the credit card debt was either settled for less or paid in full) does the credit score improve only very slightly. But the damage is still done and will take years to recover from. http://www.myfico.com/CreditEducation/ImproveYourScore.aspx
You know, my only experience is with medical debts, but with those, we have NOT been notified several times, or sometimes, even one time. No one seems to care if the address is right (and when you're dealing with an old person, the billing address is often not the same as the physical address); sometimes the bill seems to go to what they claim is a collection agency even before the insurance company finishes with it. We are perfectly happy to pay our bills, but our contract is with the provider, and that's who we pay, not a collection agency.
County in which it was opened or the county in which the debtor/Defendant resides. If filed in the imporper court a change of venue can be requested and in most cases granted by the court in which the suit was filed.
This is a violation of the FCRA (Fair Credit Reporting Act) and can be corrected quickly by the credit reporting agency. If the credit reporting agency refuses, there are many Consumer Protection Attorneys that would happily take this case on contingency. This type of violation normally never sees the inside of a court room. A letter from a well known CP Attorney will likely get awards and the prompt correction of the credit report.
Moderator
1
Welcome to RegulationRoom Aaron Racicot, and thank you for your comments. CFPB is very interested in examples of good practices by credit unions. Could you share more information about how they help out their members?
View this comment in the discussion thread
hjsthomas
2
Thank you. Please do not misunderstand me, however; I was talking about the general perception of debt in the eyes of consumers. (I have no personal experiences with debt to speak of, only my experiences working with victims of identity theft who have fraudulent debts; which is a horse of a different color.) Consumers are not educated about how debt collection and revival works. The issue in the end isn't the mechanics, or if they can request the debt not be reported. The issue is that, the way things stand now, it is not clear how repaying a debt will improve their score. It is not clear that they can ask for the collector not to report the debt payment if the debt is older than seven years. Consumers are confused and have these inaccurate perceptions because things are not clear. Again, it is the perception which concerns me - it would benefit both creditors and consumers if it was plain and clear, in language the average consumer could understand, that paying off a debt is a good thing.
View this comment in the discussion thread
stopwithspoofedcallerID
3
A debt that is paid in full doesn't improve a credit score at all. A debt that is settled for less or paid in full is the exact same. Once the damage is done to a credit score, the damage will remain. The only slight (very small) improvement on a credit score is when a bad debt was a credit card account and had over 100% utilization. Once the utilization goes down below 100% (and that occurs when the credit card debt was either settled for less or paid in full) does the credit score improve only very slightly. But the damage is still done and will take years to recover from. http://www.myfico.com/CreditEducation/ImproveYourScore.aspx
View this comment in the discussion thread
Bonita Kale
4
You know, my only experience is with medical debts, but with those, we have NOT been notified several times, or sometimes, even one time. No one seems to care if the address is right (and when you're dealing with an old person, the billing address is often not the same as the physical address); sometimes the bill seems to go to what they claim is a collection agency even before the insurance company finishes with it. We are perfectly happy to pay our bills, but our contract is with the provider, and that's who we pay, not a collection agency.
View this comment in the discussion thread
U.S. Marine
5
County in which it was opened or the county in which the debtor/Defendant resides. If filed in the imporper court a change of venue can be requested and in most cases granted by the court in which the suit was filed.
View this comment in the discussion thread
U.S. Marine
6
This is a violation of the FCRA (Fair Credit Reporting Act) and can be corrected quickly by the credit reporting agency. If the credit reporting agency refuses, there are many Consumer Protection Attorneys that would happily take this case on contingency. This type of violation normally never sees the inside of a court room. A letter from a well known CP Attorney will likely get awards and the prompt correction of the credit report.
View this comment in the discussion thread
gmt512
7
If it was fine as it is, why is this agency going through this to try to develop a more reasonable and intelligent way to deal with debt collectors?
View this comment in the discussion thread