Debt may be "parked" on a credit report

Many Minnesota residents have gone through the disappointing experience of finding a collection account on their credit report that they never received a bill for. Often, collection agencies will engage in a practice called 'parking" debt where they report a debt to the credit bureaus before communicating with the debtor.

When a person discovers that they have such an account on their credit report, their impulse may be to immediately pay the debt so that they can improve their credit score. However, once a collection account shows up on a person's credit report, paying the debt in many cases doesn't cause the account to be removed or improve the debtor's credit score.

What a debtor can do to improve their credit score after noticing a collection account is to dispute the debt with the credit bureau. After receiving a complaint from a consumer about information on a credit report, a credit bureau has 30 days to confirm the validity of the information with the debt collection company that reported it. If the debt cannot be confirmed, it will be removed from the credit report. A person may also dispute a debt with the collection company or ask the collection company to remove the item from their credit report once it is paid off.

Communicating with credit bureaus and collection agencies about disputed debts can be a confusing and frustrating experience for many people. While consumers are working on resolving their debts, they could be dealing with the added problem of creditor harassment. A lawyer may be able to help someone who is going through these kinds of debt problems to negotiate with creditors and stop creditor harassment.

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