The Downside of Improving your Credit Score

Raising your credit score has, well, scores of benefits, such as better access to credit, the ability to get more favorable rates, and an increased chance at employment and housing. For those with delinquent debt, there’s a downside. Your improved credit score makes you a target for collection activities.

Consumer reporting agencies market services to monitor their files on debtors for creditors and debt collectors. As explained by Experian:

Customers who’ve gone into arrears usually become solvent again at some point in time. We’ll monitor your debtor accounts and let you know when a customer’s ability to pay has improved so you can immediately start working the account again and collect the unpaid balance.[1]

By applying for credit or to rent a new apartment, you may be making yourself a tasty target for creditors and debt collectors. These too will find their way to the information that CRA’s have in your file and are also signs of a debtor with an increased ability to pay.  Other ways consumer reporting agencies may help creditors locate debtors include public records such as traffic tickets, fines, marriage licenses, and divorce decrees. While the CRA’s don’t say so, requesting a copy of your own credit report may provide a tool to locate you as well.


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