What is a Collection Agency and How Do They Work with Credit Card Companies? – Episode #10

Today’s question is … what is the collection agency and how does it work?  Well, in the case of credit cards, a collection agency is really a recovery mechanism for companies who are trying to recover the debt that you owe to credit card companies. What happens here is that companies often write off your debt if you haven’t paid it and after a certain amount of time they turn over the debt to a collection agency to help them collect and they’re getting paid on a percentage of whatever they collect or the debt might be sold to them and so they’re trying to recover more than the price paid for the debts. There are a lot of different ways they’re going to come after you and some of these may be unscrupulous so you really need to know your rights and you really need to clean up any collections that you have to get a really good credit score.

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