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
