(April 5th,
2007)
Yes, debt collection agencies can legally check
your credit report. When you sign on a loan application such as
a mortgage loan, credit card debt, auto loan or even a payday
loan, you permit the lender to check your credit report at anytime
they want, to their discretion. Most debt lenders will check your
credit report atleast once a year. Other debt lenders can check
your credit report monthly, quarterly, semi-annually, etc.
Why do lenders check your credit report? They
check your report for any late payments on your outstanding debts.
If you have 1 or more late payments, this automatically allows
them to skyrocket your interest rate! On the right sidebar of
this website, you will see a "Debt Consolidation Fact":
If you miss 1 or 2 payments on your
credit card debt, the issuing company will skyrocket your interest
rate to a whopping 27% - 30%!
Also, when a credit card issuing company sends
your account to any debt collection agency, they have a right
to check your credit report. This is made possible by the Fair
Credit Reporting Act.
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