Headquartered in Atlanta, Georgia, National Credit Systems is a third-party collection agency that operates independently. Initially founded in 1991, the agency specializes in recovering money for apartment owners and managers that is owed to them by consumers who have failed to fulfill their lease obligations.
If you happen to be someone who is on the receiving end of round-the-clock phone calls and aggressive letters urging you to pay owed funds to National Credit Systems, it’s essential first to educate yourself on your consumer rights. A common mistake that consumers make is to pay off their debt in collections, believing that this, in turn, will improve and repair credit.
According to FICO, the scoring system used to determine your credit score, having collections added to your credit report can negatively impact your credit score, docking the number by up to 100 points. It’s logical to think that by paying off collections, it’ll be removed from your credit report.
However, the collection listing will remain on your credit report, changing from an owed item to a paid collection.
Showing something is paid is good, right? In this instance, it can work against you, acting as a negative listing and damaging your credit score. What’s worse, is the belief that ignoring debt collections altogether will make them magically disappear. More often than not, outstanding debt collections can wind up escalating to a lawsuit.
This means National Credit Systems has the authority to slap you with a lawsuit for owed money. Should this happen to you, it could lead to a judgment that causes asset seizure, wage garnishment, and liens placed against you. And make no mistake, the judgment will be filed on your credit report and basically annihilate your entire credit score.
To avoid a lawsuit and ensure you are fully aware of your rights as a consumer, here are four things you need to know.
Make an Account Validation Request
When faced with National Credit Systems debt collections, the first thing you want to do is make an account validation request. Your request, which is asking for proof that this debt belongs to you, should be sent in writing using certified mail. Under the Fair Debt Collections Practices Act (FDCPA) you are entitled to making this request.
Once received, National Credit Systems will need to furnish you with evidence that the account does, in fact, belong to you and therefore, they own the collection rights.
Should the company fail to provide authentication of your debt, then the legal responsibility to pay owed funds no longer falls on your shoulders. Also, NCS will contact credit bureaus to have the collections listing removed from your credit report.
What happens if NCS does adequately validate your debt? The next step requires you to carefully examine the documents they provide and locate the last activity date recorded with the lender. Per the statute of limitations, a majority of consumer debt must be collected within a seven-year time frame. Confirm the laws for your state to ensure you know the exact number.
This way, if debt collection agencies are attempting to re-age your account in an attempt to collect a payment, you can exercise your consumer rights and prove that funds are no longer legally owed.
You’ve validated your account and confirmed it’s within the legal time limit. Now, you’ll want to begin settlement negotiations with NCS for your collections account. As a best practice, your negotiation should always focus on paying less than the total balance listed.
If they claim you must pay $600, it’s likely you settle your debt for less. It’s typically recommended that you negotiate a settlement payment between 10% and 40% of the entire balance owed.
A crucial part of successfully negotiating with National Credit Systems is to establish an agreement that you’ll remit payment in exchange for NCS agreeing to cease all reporting to the credit bureaus. This is a critical part of your settlement negotiation because without doing so, the collection listing will remain on your credit report and continue to damage your score.
The collection listing needs to be removed, rather than just updated to a paid collection on your credit report.
Disputing Errors on Your Credit Report
Due to the Fair Credit Reporting Act (FCRA), you’re entitled to exercise your rights as a consumer and dispute questionable, inaccurate, or erroneous items listed on your credit report. By working with a credit restoration company, like The Phenix Group, you can partner with a credit specialist to dispute and remove all reporting errors on your behalf.
For example, by filing a credit bureau dispute for the NCS collections listing, the reporting bureaus will conduct an investigation to validate your claim. During their investigation, they’ll connect with National Credit Systems for account verification. Since the terms of your settlement agreement require NCS to stop their reports, they will be unable to verify your account, and the item will be removed from your report. Taking these types of steps will help repair poor credit.
Many collection agencies take advantage of consumers, violating their rights because they assume consumers aren’t knowledgeable about these laws. Cleaning up your credit report is incredibly important for maintaining a healthy financial standing. Seeking assistance from a qualified and trustworthy credit repair agency is the most effective way to ensure negative items are removed from your credit reports.