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Know Your Rights » Moving Out » Credit & Collections

Credit & Collections FAQ

Will col­lec­tion agen­cies accept par­tial payments?

It is up to the discretion of the collection agency. You can try to negotiate a partial payment or payment plan with the collection agency, but it is within their rights to demand full payment of the debt you owe. If an agreement or payment plan in negotiated, be sure to get it in writing and keep it as documentation.

What can I do if the col­lec­tion agency vio­lates my rights under state or fed­er­al law?

You may be able to pursue a lawsuit against the collection agency for unfair debt collection practices. The success of your suit depends on the strength of your documentation. You have one year following the dates of the illegal actions to file in court against them. You can also file a complaint against the collection agency with the Federal Trade Commission or the Washington State Attorney General.

Can col­lec­tion agen­cies charge me late fees?

It depends. Consult the original written rental agreement to see if you agreed to pay for collections costs. If so, you can be held responsible for paying any reasonable charges that result from the collections action against you, including attorneys’ fees and court costs. Almost all collection agencies will charge you interest, typically 12% per year, on debts they are attempting to collect. Interest can be charged regardless of whether you agreed to it in your lease or other contract.

How long will a debt from col­lec­tions stay on my credit?

Collections debts will be reflected on your credit report for 7 years from the last activity on the original account, regardless of whether or not you pay off the entire debt. Typically the last activity will be the last time a payment was made or when the original debt incurred. If the debt is a judgment (has gone through a court proceeding), then it can be reported for longer.

How much inter­est can col­lec­tion agen­cies charge?

Collection agencies can collect 12% interest annually on debts.

Can I con­test infor­ma­tion that is on my cred­it report?

If there are errors on your credit report because of identity theft or other reasons, you may be able to petition the credit reporting agencies to have the information corrected or removed. You can put a request in writing regarding the error to both the credit reporting agency and the entity that provided them the information. Include copies of any documentation you can gather to support your claim, and send your correspondence certified mail, return receipt. Be sure and keep copies of all your letters. The credit reporting agency usually has 30 days to investigate your complaint. Even if your complaint is not resolved following the investigation, you can request that a copy of your dispute be included in your file and accompany all future copies of your report when they are requested. See more information and a sample dispute letter at the FTC’s How to Dispute Credit Report Errors.

What can I do if infor­ma­tion on my cred­it report is being used against me in ten­ant screening?

If the landlord denied your tenancy in part or entirety because of your credit report, they must notify you in writing that they did so and provide you with the name, address and phone number of the credit reporting agency that provided that information to them. In turn, that credit reporting agency must provide you with a free copy of your credit report. Typically, in order to obtain the free report you must make the request within 30 days. For more information, see the Federal Trade Commission’s A Summary of Your Rights Under the Fair Credit Reporting Act. The FTC also has a guide to cleaning up your credit called Credit Repair: How to Help Yourself.

The Prop­er­ty Man­age­ment com­pa­ny of the build­ing I live in has a col­lec­tions depart­ment. Are they cov­ered by laws per­tain­ing to col­lec­tion agencies?

Collection agencies are considered to be a business whose primary purpose is debt collection. Management companies or businesses that collect debts through collections departments are not true collection agencies, and therefore not covered under federal or state laws pertaining to collection agencies. They still have power to collect debts against you, but are not regulated in the same way. Speak to an attorney for more information on how to dispute non-regulated collections actions against you.