WHAT HAPPENS IF YOU FAIL TO PAY A DEBT ?
In case you default on a loan, credit card, or any of your utility payments in some instances, you may end up getting your account transferred to a collection agency, which is a third party organization who’re usually hired to collect a company’s unpaid debts. Most of the people usually don’t prefer to pay a collection agency, but there are some risks involved in such a decision. Here’s a brief look at possible scenarios if you don’t pay your debt:
- If you don’t pay on your defaulted account, the debt collectors have the ability to report your account to credit bureaus, which can impact your credit score negatively for several months or even years. Everyone knows how important it is to maintain a good credit score, so make sure that you avoid such steps.
- Furthermore, debt collectors usually make numerous phone calls in order to ask you to pay your debt. Since their primary job is to collect your debt, they may sometimes make consistent calls on regular basis, which may irritate you at times. However, you can write to them asking to stop calling you.
- Additionally, debt collectors also pass on your unpaid debt activities to other firms, which may hinder the chances of improving your FICO score.
- In the recent years, employers have started looking into job applicants’ credit reports while assessing an application. So if you get a bad credit score for not paying a past due debt, it may also have an impact on your employment as well.