You’re starting to understand personal finance. You realize there is much you could do to boost your financial status. Your ability to pay debts is a primary sign of financial health. Let’s pause and talk about collections.
What is collections? When you default on a loan or payment. If you have opened an account with a servicer or provider, something like a gas bill, and never made a payment the account becomes delinquent. The servicer hires a collection agency to receive the funds from you.
If you have an item in collections this will need to be removed. By removed we mean paid off. Before you purchase any stocks or open any new cards, which you may be having difficulties doing, pay off any overdue bill that went to collections. These are omens for your financial health/ status.
Here’s what to do. Call the original company issuing the service (maybe it’s the gym, doctor, milkman) see if you can pay them outright on the condition that the collections agency removes their file. They may be able to agree to this. Otherwise, you’ll have to contact the collection agency, set up a payment plan and make the payments as you would, until paid in full. The collection agency will have a service fee charged for their part, but make the payments. Paid in full. Don’t let your accounts be delinquent ever again.
You’re starting to understand personal finance. You realize there is much you could do to boost your financial status. Your ability to pay debts is a primary sign of financial health. Let’s pause and talk about collections.