How to Pay a Collection Agency With a Certified Check
While paying off a collection account does not improve your credit score, it looks much better to lenders that you absolved past debts rather than ignored them. Unfortunately, not all collection agencies accept personal checks. If you are not comfortable permitting a collection agency to draft your bank account directly, consider sending the company a certified check. Certified checks reflect the bank's authorization that it has "reserved" the funds until the company cashes the check -- providing security for the collection agency and helping you avoid a bank draft.
Other People Are Reading
Instructions
-
-
1
Contact the collection agency and make arrangements to pay off the debt. Depending on how old the collection account is, the company may accept less than the amount you owe to settle the account.
-
2
Ask for any concessions in writing. This provides you with documentation of any settlement program or payment plan the collection agency agreed to.
-
-
3
Visit your bank and request a certified check in the amount of your payment. Pay the check fee. Banks often charge several dollars for certified checks.
-
4
Write a letter to the collection agency that contains your name, account number and the details of your agreement. This ensures that the company correctly applies the payment to your account.
-
5
Mail the certified check and your letter to the collection agency.
-
1
Tips & Warnings
If you plan to pay off the account in full, ask the company to send you a statement after receiving your payment that acknowledges your account no longer carries a balance. This "zero balance statement" protects you from collection activity in the event the collection agency sells your paid debt to another collector.
Paying a debt in collections will not result in the collection agency removing its trade line from your credit report unless the company previously agreed to do so.
