family it's your girl Jazzy Mac and I am here to tell you why you need to stop paying
your collection account
yes you heard me right i said stop paying your collection accounts
and trust me people my credit score is in the 800s and this is the same exact strategy that
i use when i've raised my credit score so listen up people the reason why i am telling you guys to
not pay your collection accounts is because there is a very very common misconception that if there
are collection accounts on your credit report that all you have to do is pay it off and then it's
going to boost your credit score your credit score is going to magically increase when you pay off
your collection accounts i'm here to tell you that according to the fdcpa laws and according to
the credit reporting system of scoring that is not how credit works and i will tell you why
anytime you have a collection account on your credit report that account is going to have the
same weight or impact or your score no matter what the balance is so whether you have a five thousand
dollar collection account on your credit report or a five dollar account it's going to have the same
impact so the reason why paying it off doesn't make sense and it doesn't help you is because
once that account is reported as being in collections even if the balance shows zero
that derogatory remark is still going to be attached to your credit score and it's
going to still be listed in your credit history i have made the mistake of paying a collection item
and thinking that it was going to raise my score and it didn't um i at one point you know assumed
that if i started making monthly payments on it that that would give me some type of positive
history and that's not true either you're looking at a person that had a credit score in the 400s
not that many years ago okay and it's now in the 800s so trust me
when i tell you i know what i'm talking about i've researched this i have my own credit academy
i have all the templates that i used when you know i've raised my score so
trust me when i say stop paying collections now i'm not telling you to stop paying your
credit card bill every month or to stop paying your card note because that's going to only make
your credit worse what i'm saying is that if you owed someone let's just say you owe publix
you owe public some money and after a while you didn't pay public so public sends that account to
an outside collection agency to collect that money well at that point they've sold the debt to that
collection agency and what essentially happens at that point is you no longer owe publix you now
essentially owe the collection agency and let's do a little bit legal diving now your contract was
with publix you are obligated to pay publix now there may be some sort of addendum or some terms
within the contract that says we will refer this to an outside collection agency if payment is not
received or you know satisfied or whatever and that's fine they can say that there it is their
legal right to list that in your contract however there are still federal laws the fdcpa laws that
supersede anything that is written in a local contract between a business and a consumer
so what i mean by that um if dcpa has laws that state how much a collection agency can
collect um and in what time frame they can try to collect that money and things of that nature so
i'll give you an example when i was living in alabama i live in atlanta now of course when i was
living in at alabama there were you know certain collection accounts that i'd acquired you know
not knowing how to take care of my credit this was when i was super young so i read up on those laws
um and this was me just doing google searches or whatever but i read up on the laws and i saw that
the amount of um collection fee that was being attached to the original debt that i owe was
illegal i think um you know and all you know different states have different laws but you know
let's just say for instance um the law in your state is that a collection agency cannot add on
more than 20 of the account balance um when your account is referred to them so that means you know
maybe your medical bill was a thousand dollars you didn't pay it it got sent to a collection agency
and 20 of that would be 200 which would mean that the maximum that they could bill you for as a
collection agency is twelve hundred dollars right well there are some collection agencies that will
push the envelope and instead of charging the legal twenty percent they might try to charge
33 percent in collection fees which means that you owe the thousand dollars and they're charging you
333 dollars you know 33 percent just to send you a couple of letters demanding payment that's not
legal if the contract terms that you originally signed said that you were going to pay 20
then that's what they have to honor um even more so some contracts will leave it very bland where
they will say well this account gets referred to a collection agency then they have to pay you will
be obligated to pay whatever the collection agency charges and wrong in my donald trump voice simply
because when they leave it vague like that what did we say the fdcpa laws supersede anything that
is in a contract between a business and a consumer so this is to protect the consumer from basically
becoming a victim of the collection agencies because that's how a collection agency makes their
money they buy the account from someone and then they tack on their fees to collect on that account
and that's how they get rich and i personally was not going to let them get rich off of me so in one
instance i actually paid a debt um that i you know that my health insurance was supposed to pay and
that debt was thirty three hundred dollars and you guys some of you guys read about that in my blog
and that debt was thirty three hundred dollars when i went and i've read those laws and
discovered that the collection agency had charged me 33 percent to collect that amount oh y'all
i had my pen and my paper ready not only did i you know of course i disputed it but i also put in my
dispute letter that you know according to the fda cpa laws you're not allowed to charge this amount
and that line alone invalidated the entire debt so while it was like you know a debt
that technically belonged to me and while it was something that was actually like a legitimate debt
because they charged me an illegal collection fee to collect that debt it invalidated it
so when i paid it it's not like they can just refund back the portion that i owe
like they had to refund back the entire 3 or i would have had a basis to sue them so
either way i would have got paid but you know that's why i say don't let anybody trick you
into saying if you pay your collections then your credit score is going to shoot
up no dispute it because if you dispute it nine times out of ten especially if you dispute it by
mail it's going to get deleted off your report because people don't you know necessarily
okay let's say like this you only give the credit reporting agencies 30 days to validate a debt by
law if they can't validate it in 30 days they have to delete it now of course if you do it
online you can sometimes go to quicker you know like you can submit the dispute quicker
and somebody investigates it quicker but usually they're just sending it through an automated
system that is going to say yes this is a valid account most of the time have i gotten stuff that
you know like if i submitted a dispute online before have i gotten things deleted yeah sure
but i'm just telling you the surefire way is to dispute it in a way that's going to
require a human to do work and when you mail in your dispute letter of that collection account
you're making somebody have to go and research if this payment amount is correct if the date of
the account was correct if the name on the account is correct they have to go and validate
that like they have to you know usually get some sort of documentation from wherever the
account originated from and that requires them to either mail letters to people or to call people
um because they have to physically you know have that right evidence because usually that is what
they will pass along to you to say well this is how we validated the debt so you always want to
put in your letter you know put your name date of birth social and the account number and you
want to be very specific and say please validate that this this debt belongs to me and please also
show me the original contract now that's the line that gives them that's usually what trips those
people love when you are disputing something and you say show me the original contract
because 90 of the time when companies sell a debt to a collection agency they don't always send the
paperwork with it meaning they don't always send your original contract agreement so that
is a good way to trip them up because if they can't send you you know that original contract
agreement or they can't send you uh proof that you signed off on that contract well guess what
you got to delete it so for all of you that have those outstanding debts it's great that you want
to pay them but understand that paying them won't increase your credit you want to have it deleted
so if you want to pay them you can always ask for a pay for a deletion at the company where you say
hey if i pay this you'll send me a letter saying that you agreed to delete it from my credit report
i'm telling you 95 of the time that's not gonna happen it's they consider it more paperwork that's
not something collection agencies are interested in doing um and also collection agencies also
have a um they have an agreement with the credit reporting agencies as well
and the credit reporting agencies like equifax experian and transunion they actually make
money um to be in businesses you know with these companies so you know it's just all a big business
just you know all the big scam or whatever you want to call it so yeah stop paying that stuff
you need to dispute it and aim to have it deleted now don't think that just because they
um send you back some validation you know letters saying we validated this debt that that's it no
you have a legal right as a consumer to dispute something as many times as you feel like it
i personally would not dispute more than like four or five accounts per month um if you have more
than that i would keep it at four or five because you don't want to be like this frivolous disputer
and you don't you know just want to appear fraudulent in what you're doing but i'm telling
you that it is your consumer right to say hey this account doesn't look right to me i need you to
send me the original agreement this works great for collection accounts accounts that have been
charged off to collections now if this is like you know for a current credit card that you have where
the accounts like open and you know whatever the process will be a little bit different
um but it's always easier to get collection items deleted because you know paperwork gets lost
people don't want to actually research it somebody at the credit reporting agencies you know that
experian can easily say i got too many letters in front of me i can't find this information
just delete delete delete there's been times where i've literally had five accounts deleted
you know i put those five accounts in my dispute letter all collection accounts and they came back
less than 30 sometimes they come back in less than 30 days where you know you get a letter
saying okay this account has been removed this account has been removed from your credit file
and of course they can never be you know um added to your account again so that's how i saved money
that's how i save thousands of dollars and that's how i've raised my credit score i i exercised
my legal consumer right to dispute things that didn't look right to me even if it was just off by
a nickel if i thought my balance was supposed to be a thousand dollars and 10 cents and you
put a thousand dollars and 15 cents well that gives me a basis to dispute it if you spell my
name wrong on something that gives me a basis to dispute something and as for the originally signed
contract agreement so you guys i hope this helps you out if you've ever tried these methods please
let me know down below i'm happy to put the templates for dispute letters down below for
you guys as well because i just want to help you guys out and i don't want anybody to be a
victim to this system any longer so you guys definitely like and subscribe for more videos
so you don't miss out i mean it's the start of a new year you guys so everybody wants to
get their credit on point and i'm here to show you how to do it in half the time so check out
my other videos where i talk to you about quick tips on how to like instantly raise your credit
so guys that's all i have for you i hope everybody stays safe until the next time see you later
you