Credit scores influence more than just the loans a person can get. These scores can also affect the interest rates they need to pay. Insurers use credit scores to lay installment for homeowners and auto coverage. Most landlords utilize them to decide who can rent their units. It is also used when you apply for cell phone plans to determine whether you are making a bigger deposit.
Credit scores are your financial tool. They can be helpful or hurtful, depending on how you take care of them. There are many factors that may affect your numbers. That being said, this article will cite one of them and how bad can it hurt and affect your credit score.
Who is GC Services?
GC Services is a debt collections agency that helps debt recovery for industries like financial/banking, technology, retail, automotive, traffic/tolls/parking, utilities, shipping & transportation, government, student loan debts, and telecommunications. They are seen on your credit report as a “collection” account. This will happen if you owe the lender money and they’ve hired an agency to collect that money.
You might be wondering if GC Services is a scam or a legitimate business? It is only fair to ask this question, especially when they start calling you and demanding money. This company is a legit debt collector. They are based in Houston, Texas, and are considered one of the largest agencies in the United States.
Initially founded in 1986, they currently have 30 call centers and more than 9,000 employees. It is reported that they grossed more than $100 million in revenue last 2019 and have collected a variety of debts. If you are wondering if they can sue you? The answer is yes.
What is a Collection Agency?
Collection agencies are companies hired by creditors or lenders to recover funds that are past due. Creditors often hire collection agencies after they have attempted to collect their receivables multiple times or have an internal department that can handle the job.
A legitimate debt collector is not allowed to threaten to sue or sue a borrower because of their debt, legally take assets from the debtor if they have won a lawsuit against a debtor, threaten to harm or physically harm a debtor in an attempt to collect a payment, contact a person at work if in case they have stated that their employer won’t approve of such calls.
How does it affect your Credit Score?
Collection agencies are one of the most complained about among businesses. This is not surprising as most people have negative experience dealing with debt collectors. After debts have become delinquent, it is commonly cheaper for businesses to hire collectors. Therefore, consumers should be aware of how a collection agency works in case they have to deal with them.
Your credit report holds data about your credit accounts like loans, credit cards, and many more. Mostly, your creditors will send monthly updates regarding your payment status here. Once an account is sent to a collection agency, either the collector or the original creditor will update the credit report’s account with a “collection” status.
A collection account implies that a debtor has become delinquent on an account. An individual’s credit score will drop once a collection appears on their report resulting in a harder approval for loans and credit cards, especially if the collection remains unpaid or recent. However, a debtor can lessen this effect by paying it off.
Can I remove it from my Credit Report?
Dealing with collection agencies is no walk in the park. However, there are various ways to deal with and handle them like the following:
Know your rights
Third, party collection agencies make money by pushing payment arrangements out to you. They even use various questionable strategies to do so. Fortunately, laws like Fair Debt Collection Practices Act (FDCPA) are made to allow you to take control of the situation. Letting these collectors know upfront that you are aware of your rights can prevent them from treating you poorly or getting harassed.
Request for Goodwill Deletion
Once you paid off your debt, it is worth asking collectors to remove their entry out of kindness. A goodwill deletion is a perfect option for you if you have a good standing to them. This letter commonly explains why you were delayed for your payments and why you would want the account removed.
Negotiate a settlement
Any debtor can try to negotiate a settlement if they cannot have the entry removed through legalities. This process is commonly called pay-for-delete settlement. It involves paying the collection agency for the debt in exchange for account deletion. Once you come up with an agreement, ask them to send you a contract that states your terms.
Credit scores are a crucial part of an individual’s financial health. You certainly want to attain and keep a good credit score as they give you many benefits like receiving the most favorable terms. Hence, you do your best to take care of your dues on time. Dealing with collection agencies is never easy, but it is good to have enough information about them if you need to deal with them in the future.