You may think defaulting on a debt means your credit report will show a late payment and that’s all. But there’s more to the story.
If the creditor sells the debt to a collection agency, like Northland Group, you’ll be hearing from them and find them on your credit report. While the phone calls and letters can be annoying, the fact that they’re on your credit report is bad. You will have a hard time getting future credit when creditors see you don’t pay your bills.
Fortunately, there are ways to remove Northland Group from your credit report, but you have to act fast.
Validate the Debt Right Away
Your first step should be to validate the debt. This means you’re asking Northland Group who they are, how they found you, and what they know about you.
They are a legit company so they probably do have your debt, but they must prove beyond a reasonable doubt that it belongs to you and that they may collect on it. Ask them to validate things like the account number, outstanding balance, payment history, name on the account, and any other information you want to validate.
You must do this within the first 30 days that they contact you. If you miss that window, you’ll have other options, but this is the fastest way to remove Northland Group from your credit report.
If they can’t validate all the questions you ask, they must remove the debt from your credit report. That’s the first step.
Dispute the Debt if you can’t Validate
The next step if you miss your window to validate or Northland Group validated the debt is to dispute it with the credit bureau.
To do this, first, pull your free credit report. Find out which credit bureaus are reporting it – TransUnion, Equifax, or Experian. Next, write to the credit bureaus reporting it asking to dispute the debt.
You must include the reasons you’re disputing it – such as the name is wrong or misspelled, the account number is incorrect, or the balance is wrong. Any information that isn’t right, you may dispute and have removed according to the Fair Credit Reporting Act.
The credit bureau has 30 days to respond to your request and either remove the collection or tell you why they’re not removing it.
Pay the Debt
This final step is for everyone – unless you found out the debt is not yours and was reported in error. Validating and disputing the debt removes Northlake Group from your credit report, but it doesn’t eliminate the need to pay the debt.
But, since Northlake bought the debt for less than it’s worth, you may be able to pay less than the full amount. Figure out how much you can make and make an offer that’s lower than the full amount. Northlake will likely counteroffer what you suggest, so leave room for negotiation.
In your negotiations, if Northlake is still on your credit report, is to ask for a pay-for-delete. This means you ask them to delete their collection from your credit report if you pay as agreed. It’s a win-win for both – you get it off your credit report and they get paid.
When you reach an agreement, get it in writing.
How to Pay the Debt
How you pay the debt is important. They’ll try to get you to provide your checking account information for automatic withdrawals – don’t do it. We suggest not paying them via check either.
Instead, pay for a cashier’s check or money order and send it with return receipt requested so you have proof they received the funds.
Check your Credit
After you pay the debt, check your credit report again. Wait 30 – 60 days after you send the payment and make sure Northlake removed the collection from your credit report. If they didn’t hold up their end of the bargain, write a dispute letter to the credit bureau and provide a copy of the agreement Northlake sent you.
It’s important to remove Northlake Group from your credit report. A collection can haunt you for 7 years – that’s 7 years of future creditors wondering if you’re a good risk. If your collection is large, it can hurt your chances even further.
Do what it takes to get the collection off your credit report and negotiate an agreement outside of the credit report. Stick to the agreement and you’ll improve your credit and get the collectors off your back.