I Can’t Pay My Debt, But The Collection Agency Threatens To Report Me

Have you ever been delinquent or late on a payment and have gotten that call from the creditor or collection threatening to report your late payment on the delinquent date to the credit reporting agency?

Did they also threaten to ruin your credit report if you don’t make the payment right then?  Well, sit back, take a deep breath and tell them to “go ahead, report me.”

Ignore threats from debt collectors threatening to report you to the credit reporting agencies

Most, if not many, creditors are members of one if not two or three credit reporting agencies.

What this means is that they adhere to a structured and standardized procedure for reporting late payments, delinquent accounts and charge-off accounts to credit bureaus.

Only if the collection agency or creditor is a member of a Credit Reporting Agency are they allowed to receive information and supply information about a consumer’s credit file.

A person’s credit file is usually updated once a month detailing the amount owed, payment status, days delinquent and what, if any, collections actions have been taken.  This process is automatic and there is usually no discretion.

The collection agency promises not to report me if I pay right now

Beware: it’s usually an empty promise if the debt collector promises to withhold negative information from the credit bureau unless a payment is made.

They will often attempt to get a payment over the phone from you.  Never give any information to a debt collector over the telephone especially bank account or credit card information.

If the creditor or debt collector is a member of the credit reporting agency it’s likely that the account has already been reported and their threats are meaningless.

Moreover, you’ll likely be speaking with a routine administrative person who has no authority to withhold or supply your payment history or information to the credit bureaus.  These threats are just tactics intended to scare you into immediately making a payment.

These threats are simply tactics intended to scare you into immediately making a payment.

What can I do if the debt collector threatens to report me but doesn’t?

It is illegal for a debt collector or creditor to threaten to report you to the credit bureau and not actually do so.

In fact, if such threat is made and carried out you may be protected under the Fair Debt Collection Practices Act.

This law will enable you to file a claim against the debt collector and be awarded up to $1,000 in damages, the amount you’re out because of the false threat and be awarded attorney’s fees. Additionally, you may be able to file a claim under your state debt collection law.

Want actionable advice on dealing with debt collectors that you can put to use in your daily life? Click here to sign up for our newsletter with these tips and more!


Never offer any personal information when dealing with debt collectors

If a debt collector wants you to make a payment over the phone by giving your account information, don’t do it!

First, many times debt collectors are working on commission and will say anything to get you to make a payment or provide them with your account information to make future payments.

What you may find out is they will debit your account and not stop with that one payment. The next thing you know, the debt collector has debited your account many times before you’re able to get it stopped.

Also, they may harass you in the evenings or worse at work.  The best way to communicate with debt collectors is in writing. This way you have a formalized agreement with the debt collector in the event you need proof of the agreement.

What types of creditors usually report to the credit bureaus?

Credit card companies usually are members of the credit reporting agencies and report consumer accounts every month automatically.

Debt-collectors collecting on behalf of doctors and medical and similar providers may not always report to the credit reporting agencies. You should always be careful dealing with threatening debt collectors. If your account is delinquent, most times it’s because you don’t have the money to pay the account at that time.

If you succumb to their threats to report you to the credit bureaus and make a payment to the detriment of another creditor who report their accounts on a regular basis, you’ll be in a worse position than if you just ignored the threat.

Finally, contact an attorney about this options if you have any stress or uncertainty.

Like this post? You might also like: Here’s How To Stop Unauthorized Access of Your Consumer Credit Report

Shawn Smith
Founder of TeachLegal


Shawn Smith is the founder of TeachLegal, where he helps readers educate themselves on personal finance, credit repair, debt solutions, and consumer law.

Shawn is an attorney representing clients in the Iowa District and Appellate Courts, Iowa Northern and Southern District Federal Courts, and the Northern and Southern District Bankruptcy Courts for the State of Iowa.