“Get Verification When You Pay Collection Accounts”

“Get Verification When You Pay Collection Accounts”




Many clients that I obtain a credit report for have collection accounts and often say these accounts are already paid. I will explain that I need evidence so that I can send the information to the credit bureaus. So often they say that they are not sure when they paid or if they even got a receipt and they don’t recall getting anything that will evidence payment or settlement.


I hate the idea of folks paying for anything twice, but without verification the bureaus can’t take anything off the report. Sure they can contact the creditor, but seldom has any client gotten them to take the obligation off the credit report.


Remember, collection agencies or creditors that are attempting to get paid will literally say almost anything in order to convince you to pay them, even that they will take the debt off the credit report and then they don’t follow through. Most folks believe them and expect the negative items to be taken off, but unfortunately they often lie.


I have had clients file complaints with the CFPB, consumer protection and other entities and the results are very frustrating at best. Sometimes depending upon the amount of the debt, it makes sense to just work out another settlement.


There are a couple of important reasons to get rid of these collection items. Often the creditor reports to the credit bureaus every month and every month your credit scores are being affected. The other reason is the lender may require the obligations to be paid prior to giving a mortgage.


Here is what is important, if a settlement is reached get evidence, keep canceled checks, money orders, credit card receipts or bank statements that show the payment.


If the creditor was paid, follow up to make sure the account shows as paid or settled.

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 55 commentsJoe Petrowsky • September 24 2015 12:13PM


Joe, gone are the times when you can accept someone's oral promise! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) over 4 years ago

Good Morning Joe: When I work with first-time home buyers who are trying to clean up their credit to qualify, I will remind them to document....document... document ... all the payments and settlements they make with the collection agency.

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) over 4 years ago

Hi Joe.  People lie to collect money.  Say it ain't so Joe.  Bummers.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) over 4 years ago

Soooo True....we just had a situation where a bank said one thing and did another with a payment for one of our Seller/Buyers...very frustrating !

Posted by Sally K. & David L. Hanson, WI Real Estate Agents - Luxury - Divorce (EXP Realty 414-525-0563) over 4 years ago

Good Tips Joe. Yes save your receipts/documents/statements!

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Home and Condo Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) over 4 years ago

Oh gosh, how frustrating.  Yes, it is good to keep records and make sure those places adjust the records. 

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) over 4 years ago

This is an excellent reason why we should all keep and record our transactions.  Very easy to do if you pay by credit card.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 4 years ago

Good morning Joe.  I haven't personally checked my credit report in years and maybe even decades.  I just know I get what I want and ask for.  

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) over 4 years ago

Joe, with borrowers with credit issues should talk to a seasoned loan officer to get the correct information on how to correct issues! 

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (House to Home, Inc. - Denver Real Estate - 720-231-6373) over 4 years ago

Good morning, Joe -- establishing a habit of proper record keeping makes life a lot better -- not always easy but beneficial indeed.  Good post.

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 over 4 years ago

Good morning Joe Petrowsky,

Excellent advice! Joan Cox is right "borrowers with credit issues should talk to a seasoned loan officer to get the correct information on how to correct issues!" If they take these issue to you they have the best chance of obtaining the right information and better credit scores!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) over 4 years ago

Good morning Joe. I have a common last name. Years ago I had a credit report done that indicated a delinguincy to Macy's for an item bought 500 miles from me in a place I had never been. It wan't easy but I eventually got a letter from them indicating it wasn't me, and had the item removed from my credit reports.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) over 4 years ago

Yes, keep records of everything that gets paid off, especially when you're hoping to buy a home.

Posted by Kat Palmiotti, The House Kat (406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty) over 4 years ago

And if the creditor is local go do it in person and get a receipt on letterhead signed by a manager. This carries lots of weight.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) over 4 years ago

Joe Petrowsky One of the problems is that the collector might have bought the list from the actual lender. After they do their best to collect everything the list gets sold again, and somebody else tries to collect the same debt again even if it was paid to the last collector.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) over 4 years ago

This is great advice for consumers with collection accounts. I will schedule a re-blog.

Posted by Roy Kelley (Realty Group Referrals) over 4 years ago

Hello Joe,  unfortunately I have had to deal with a few creditors in the past.  In paying them off I would request a letter up front agreeing to a certain amount to "pay in full" and 30 days after receipt of that letter to do so.  With hat I always had a copy cashiers check to go with that letter as proof.  It was amazing how long it would take to get that letter and the # of phone calls in between still demanding payment.  They definitey are geared to getting paymnets not the client service side of things.  Good advice for your clients .  Make it a great day.  Mark

Posted by Mark Don McInnes, Sandpoint, North Idaho Real Estate - 208-255.6227 over 4 years ago

excellent blog Joe. Such important information for people cleaning up their credit.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) over 4 years ago


Excellent advice as usual Joe.  Wishing you and Gail a great weekend.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) over 4 years ago

A few years ago I discovered some random negative item on my credit report from an HOA in a neighborhood I hadn't lived in for almost 8 years. I called and took care of the issue and made sure to get documented evidence that it was resolved. 

Posted by Nicole Doty - Gilbert Real Estate Expert, Broker/Owner of Zion Realty ZionRealtyAZ.com (Zion Realty) over 4 years ago

Good record keeping is important.  Cashier's checks, certified mail, receipts, letters, bank statements, credit card statements.  Consumers should also do some reading to learn their consumer rights regarding credit reports and debt collection.

Posted by Jerry Lucas, Mobile Notary Colorado Springs, CO Notary Training (ABC Legal Docs LLC) over 4 years ago

Joe what I also run into on occasion is the Borrower pays the creditor instead of the collection agency.  So what happens is the creditor keeps the money, does not pay the collection agency their cut, so the collection agency keeps on reporting the collection.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 4 years ago


Your advise is right on point . . . . Thanks for sharing an informative post.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 4 years ago

Hello Joe Petrowsky 

The Devil is in the details...

Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek Team) over 4 years ago

I see this happening more and more!!! Thanks for the article!!!

If a settlement is reached get evidence, keep canceled checks, money orders, credit card receipts or bank statements that show the payment.

Posted by Sham Reddy CRS, CRS (H E R Realty, Dayton, OH) over 4 years ago

Joe, you are exactly on point. There are people who are punished twice because their credit report makes it seem like the debt is still owed. Your article provides practical advice.

Posted by Tai DeSa over 4 years ago

Thank you for the information. I will share this with others.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) over 4 years ago

This topic cant be stressed enough -- especially when trying to obtain a loan. 

Posted by Blatt + Cutino, Broker-Associate 831/206-8070*Call today* (Keller Williams Coastal Estates) over 4 years ago

Wise advice. In my 26 years I have had this come up many times when someone said they had paid the debt but did not verify or keep receipts until confirmation. Getting them removed after the fact is a pain.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 4 years ago

Seems like obvious advice, but I know many people just simply are not thinking about this. Part of the reason they get in trouble in the first place.

Posted by Rob Arnold, Metro Orlando Full Service - Investor Friendly & F (Sand Dollar Realty Group, Inc.) over 4 years ago

When this system works..fine. When it doesn't, a nightmare is upon you!

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 4 years ago

I had a client that never paid the collection company but paid the debt directly.  The companies notified the collectin company.  But he never checked with the collection agency and they did not release the debt from the court because he had not paid a $10 fee.

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) over 4 years ago

Great Advice!  Too bad the CFPB does not establish something to require better reporting from collection agencies, banks or any other creditor to protect consumers.  Now that would be better use of regulator's time!

Posted by Shirley Coomer, Realtor, Keller Williams Realty, Phoenix Az (Keller Williams Realty Sonoran Living) over 4 years ago

Oh Joe Petrowsky this is so important! I remember I had settled an emergency hospital bill in 90s that showed up when I was buying a home in 2001! And had to settle for less than stellar product as the creditor would not acknowledge!

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) over 4 years ago

Good idea to keep a paper trail. Many debt collection agencies operate outside the law. The selling of collection accounts after a debt has been paid should be illegal. I hope we see CFPB regulation on debt collectors in the future. 

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) over 4 years ago

OMG..please say this over and over. Rather than that, I tell buyers to do nothing without sitting in front of their lender when they do it. 

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) over 4 years ago

Excellent advice Joe Petrowsky . I actually lost my cancelled check from 5 years earlier . Bank that I belonged to was sold and no records.  I learned and it was costly

Posted by Vera Gonzalez, Gonzo For Real Estate (RE/MAX Suburban, Inc.) over 4 years ago

Great to know and remind clients of this. Hard to keep track of everything we do, but important!


Posted by Janis Borgueta, LIC RE Salesperson (Key Properties of the Hudson Valley ) over 4 years ago

I did a deal for a collection agency owner some years ago.  This cat was maybe 26 and netting out around 80g's a year with just a small crew.

They hammer everybody to death for every dollar like crazy.  Get EVERYTHING in writing with those people.  Twice.


Posted by Scott Thompson, Commerical Finance - Blue Springs, MO (Columbia Mortgage Plus) over 4 years ago

Great reminder to keep proof of payment.  I would add to check credit report after payment to make sure collection has been cleared and removed.

Posted by Les & Sarah Oswald, Broker, Realtor and Investor (Realty One Group) over 4 years ago

This is great advice Joe, I know a lot of buyers that claim they have paid but cannot prove it. That means they cannot buy a home.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) over 4 years ago

Joe, this is good advice!  It's surpriseing how many don't undestand the importance of tracking the payment history.

Posted by Beth Paterson, CRMP, NMLS #342859 (Reverse Mortgages SIDAC, LLC, NMLS #1790592) over 4 years ago

Another thing that consumers don't realize is that these debts may be sold multiple times and the debt changes hands repeatedly.  Without proof that the first collector was paid, the debt could be reported by multiple collectors. It is important to have a cancelled check or credit card statement to show that which collection agency was actually paid. 

Posted by Rhonda Burgess, Moving to Nashville TN Real Estate Specialist (Southern Living Realty Partners) over 4 years ago

It's mind boggling that people will pay off a debt but not get a receipt! Well, unless they pay cash, they do, they just don't keep good records, I guess. 

Posted by Hella M. Rothwell, Broker/Realtor®, Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea over 4 years ago

Pay now to do it right or pay again with your own time and additional legal and filing fees to expedite the processing of the "errors" . I like it. And I've seen it all happen before.

Posted by Virtual Realty Consultants, Making the American Dream a Reality (Virtual Realty Consultants LLC) over 4 years ago

Verification is good for authenticity purposes and the rest is up to the report between the buyer and seller.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 4 years ago

You've all seen it before and it's a good thing you're wiser for it and you can become better and better at your job that way.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 4 years ago

Good morning, Joe... a great reminder. I am always amazed at how many people pay for "whatever" and don't ensure they have proof of payment. And it's not just for collection items. I've seen this with my own clients. Never did understand why it seems so hard for people to get a receipt, invoice market paid, copy of their check, etc.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) over 4 years ago

I did not realize this was a problem. It will be a topic of conversation when buyers ask me these types of questions. I always tell them to be sure to have a in-depth conversation with their loan officer.

Posted by Sussie Sutton, David Tracy Real Estate for Buyers & Sellers (David Tracy Real Estate) over 4 years ago

Thank you Joe Petrowsky this is so important.  I have seen this happen so many times in the past.  You really have to be educated on this subject and I appreciate your explaining this. Its really unbelievable at how you cannot trust these guys to do what they say.  I guess we need proof of everything theses days.  Must of been nice when your word and a hand shake meant something.

Posted by Adele Langdon, Exclusive Realty Inc. over 4 years ago

Of course it's not at all probable that some of the collectors would deliberately try to collect a second time for the same debt.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 4 years ago

When I bought my house someone turned me over to collection for $25. It was an insurance deductible that no one had ever told me about. It was a pain getting it cleared.

Posted by Bill Reddington, Destin Florida Real Estate (Re/max By The Sea) over 4 years ago

Great advice ! Keep a paper trail because it looks like as soon as these folks are paid in full they become vapor !

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) over 4 years ago

Joe, this is very important. Always keep records of things being paid off! Always! Thank you for the reminder!

Posted by Marney Kirk, Towson, Maryland Real Estate (Cummings & Co. Realtors) over 4 years ago

Joe Petrowsky  I caught this on a re-blog  This is ultra important information

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) over 4 years ago