Will reporting someone to the credit bureaus help collect your debt?

So here you are holding the bag. You extended credit or product or service to a customer and they STILL haven’t paid you. You’ve tried almost everything you can think of. You’ve sent letters. You’ve sent emails. You’ve even called them. They even promised to pay you!!
Now you’re asking yourself: “Should I report this customer to the credit bureau?”
Not so fast.

First of all, do you have an account with the credit bureau? If so, are you willing to update the customer’s record with the credit bureau on a regular basis? Are you familiar with FCRA regulations? Do you know how to handle a credit bureau dispute?

I pose these questions because you need to answer yes to all of them before you effect someone’s credit. The customer has rights. Yes, you have a right to be paid too but this is America, a land of many lawsuits and consumer’s rights. Frustrating to think about isn’t it?

Here’s the good news: There are people who do this credit reporting thing for a living and dealing with them is CHEAP compared to the alternatives. They are called collection agencies! If you place an account with a collection agency they will not only call and write letters to your dear customer but they will report to the credit bureaus their payment habits! It’s usually a GREAT deal because most good agencies operate on what’s called a “contingency basis”. This means you don’t pay them a dime until they collect money for you. Pretty great concept if you think about it carefully. No more headaches calling and writing the customer. No more learning new laws to avoid being the target of nuisance lawsuits. Worried about your reputation? Guess what? Any collection agency worth their salt will do everything they can to preserve your image. I bet you’re wondering WHY a collection agency would even care about that. Here’s why: They understand that if they harm your reputation or abuse your customers, they won’t get any more of your business. Not only that, but remember when I said that America is the land of many lawsuits? A smart collection agency doesn’t want to be sued. It’s too expensive.

Bottom line: Using a collection agency is an outstanding way to control losses and exercise YOUR rights for a change!!!

Brent Anderson, P.C.S. / Summit A•R / Brent is a Professional Debt Collection Consultant and Speaker with 20 years of experience in all aspects of the business of debt collection. banderson@summitcollects.com 763.712.3778