Where’s My Money, Man?
By Chris Buchheit on May 25, 2010
.jpg.aspx?width=75&height=75) So you sprang for that expensive swimming pool with the gold lining, filled with strawberry pudding. Totally expensive, top of the line, and perhaps too ambitious considering your finances. Is it worth it? If you don’t get that pool completely paid off in a timely fashion, your account might get moved into collections, which basically means a collections agency will be put in charge of getting the money out of you, and you end up getting annoying phone calls.
There are many ways accounts can end up in collections. Generally what happens is that when a consumer fails to pay a bill, the creditors turn to a collections agency to help get the money repaid. All this means is that another company is in charge of getting the money you owe to the original creditor. However, it does not always work that way. Sometimes the consumer and the creditor’s billing histories do not correlate – sometimes the consumer believes that he or she has already paid in full, but the creditor disagrees. Under these circumstances, the account might move into collections.
However, under the first set of circumstances, where someone fails to pay a bill for a few months, the account will be moved into collections, and those annoying collection agencies will be calling you right around dinner time until they believe you have paid the bill in full. Under the second set of circumstances, where you actually paid your bill, but the creditor has either not received your payment, or have false records, the account might be unfairly moved into collections. If this happens, make sure you take care of this as soon as possible. If your credit agency sees that an account has moved into collections, your credit score will be affected – and not in the good way, but in the negative, downward, crappy way.
If you keep your finances under control, there is practically no way you can be moved into collections. Keep your finances in check, spend within your means, and try not to resort to credit too often. If you do resort to using credit, be sure to negotiate a billing schedule that works out best with your finances.
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