Many people understand the anxiety that accompanies having collections on their credit report. However, knowing you aren't alone isn't enough to make you feel better, especially if you're trying to raise your credit score to gain access to better loan opportunities. While it's certainly more challenging to achieve a 700 credit score with collections, it isn't as impossible as it might seem.

In this guide from Georgia Auto Pawn, Inc., we'll explain everything you need to know about how to raise your credit score after collections, including the collections statute of limitations in Georgia, credit report impacts, and disputing collections in Georgia. We will also go over how emergency loans like title pawns can help when you cannot afford your debt.

What Are Collections?

Collections are accounts that are transferred from creditors to collection agencies or companies. This happens when you default with your original lender (typically after a period of three to six months of missed payments).

Your lender can decide to collaborate with the agency or sell the debt to them. Whichever method they choose, your account is deemed a collection account from here on out, and you'll need to work with the agency to settle the outstanding bill. 

Being in collections will reduce your credit score. You'll find your debt under the "Collections" section of your report, alongside relevant information like the agency's name, the amount you owe, the status, and the type of debt.

How Collections On Credit Report Impact Your Score

The effect of collections on your credit report can be severe and long-lasting. Your credit score will go down if your credit account goes into collections. However, the extent to which your credit score is affected depends on multiple other factors.

The following are some factors that can affect how much your credit score goes down after your account goes into collections:

• Age — The newer your collection account or debt, the more negatively it will impact your rating and lenders' views of your creditworthiness.
• Number — If you have more than one collection account, it will decrease your creditworthiness, even if you manage to raise your score slightly. Naturally, multiple collection accounts also cause a significant initial rating drop.
• Credit mix — Your credit mix is the various types of credit accounts on your report. Even if you have a range of account types, just one collection account can seriously reduce your score.
• Credit utilization — Your credit utilization is the amount of debt you have compared to your available credit. Since collections accounts mean more debt, it could increase your utilization ratio over the preferred 30% to 35% mark, negatively impacting your credit rating.
• Payment history — If you've reached the collections point, you have already missed several payments. Since payment history is one of the most influential credit score factors, missed payments can decrease it.

How Long Do Collections Stay On Your Credit Report?

The collections statute of limitations in Georgia depends on the type of contract associated with the debt. For oral contracts, it's four years. For written contracts, it's six years. It may be worth noting that a credit card may fall under the four-year statute of limitation if the Credit Union cannot bring out a written contract and the suit is filed as an account stated or open account. 

As per Georgia credit laws, the clock starts on the statute of limitations on the date your payment was due and not paid (otherwise known as the default date). The exception is deficiency balances. In this case, the collections statute of limitations in Georgia begins from the date of the sale of the collateral.

Can You Have A 700 Credit Score With Collections?

With all that in mind, it may seem like achieving a 700 credit score with collections is impossible. While it's challenging, you might be able to reach a 700 credit score despite having a collection account on your report. Just note that when a credit bureau deploys a derogatory note, the chances of reaching a good, very good, or excellent credit rating are drastically lowered.

There are two things you can do to achieve a 700 credit score: dispute collections and make decisions that can increase your credit score.

The Process For Disputing Collections In Georgia

There may have been an error from a creditor that led to your credit account going into collections. In that case, you can dispute collections to resolve the issue and raise your credit score after collection. Compile all the information regarding the error and begin the process to get the problem resolved.

If you believe there's a debt error on your report or would like to remove a paid collection account, here's how to go about disputing collections in Georgia:

1. Write a letter that's specific and precise. Include your name, social security number, address, date of birth, name of the company, an error statement, the remedy sought, notice period, and the relevant documents.
2. Send the letter to the Consumer Reporting Agency (CRA). Always send by certified mail with a return receipt. 
3. When they receive your letter, they'll decide whether it has merit.
4. Then, they'll do one of the following:
1. Delete the disputed information
2. Deem the dispute to be frivolous and tell you their reasons
3. Forward to the creditor

How To Raise Credit Score After Collections

If you cannot dispute your credit account going into collections, you're only other avenue for getting a 700 credit score is to make smart financial decisions to increase your score. To raise your credit score after collections, you should first resolve your debt with the creditor.

While it will stay on your credit report, you can at least pay the debt in the past to focus on establishing a positive credit history. Make smart financial decisions, don’t take on massive debt, and diversify your credit mix to keep your score as high as possible.

The following are some methods to raise your credit score after collections:

• Maintain a low credit utilization ratio (under 30%)
• Keep old credit accounts with positive payment histories open
• Pay your bills on time
• Track your history
• Pay off credit cards
• Rebuild your credit with credit builder loans

How To Get A Title Pawn With A Collections Account

No matter how hard you try to raise your credit score after collections or dispute them, results take a while to shine through. As per Georgia credit laws, collections accounts stay on your report for up to four years (oral contracts) or six years (written contracts).

If you’re stuck with bad credit, what are your options for emergency cash? Georgia Auto Pawn, Inc. offers title pawns to those with bad credit scores due to collections, allowing you to borrow up to $15,000. These short-term pawns are designed to give you quick access to cash when you need it most without a lengthy approval process.

In fact, you only need three required items to be approved:

• ID — Most customers use their driver's license, but you don't have to. We accept all forms of primary identification (e.g., passports, student ID cards, etc.), as long as they contain your full legal name, date of birth, and photograph. You must be at least 18 years of age to qualify, and your name must match across all documents.
• Lien-free title — Lien-free titles show you own your vehicle outright without any outstanding liens or judgments against it. Since we place a lien on your title to secure the loan, we need to ensure it's initially lien-free.
• Vehicle — Your vehicle determines how much you can borrow with a title pawn from us. We consider factors like average market value, condition, age, make and model, and service history when evaluating its worth.

The approval process for Georgia title pawns is quick and easy. You can start online by filling out our contact form, discussing titles and details over the phone, and getting approved in person in less than 30 minutes at one of our Georgia store locations.

Get A Title Pawn From Georgia Auto Pawn, Inc. – Borrow Up To $15,000 Today!

Achieving a 700 credit score with collections isn't impossible, but it's unlikely. However, that doesn't mean you can't gain access to convenient loans while dealing with a lowered credit rating.

Here at Georgia Auto Pawn, Inc., we offer tried-and-true title pawns that let you borrow up to $15,000 to fund emergencies. Contact us for assistance today by filling out our online inquiry form or calling us directly to discuss getting bad credit title pawns.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.