What is a Junk Debt Collector

Junk debt buyers are collections agencies that purchase bad debt. The debt can be anything from an overlooked medical bill to a defaulted credit card. Junk debt is often called zombie debt.

In many cases, there have been previous attempts by other collection agencies to collect the same debt. Junk debt buyers purchase these debts in lots, often for pennies on the dollar, in the hopes of making money collecting them. Junk-debt buyers purchase old, bad debts that the original creditor wrote off as uncollectable, and then hound you for payment years later when your credit score who never paid that bill for the last 10 years, they won’t waste your time. But if you’ve gone on to purchase a home and clean up your act and you’re now enjoying a 680 or more score, you’re their prime target, because you now have something to lose.

Junk-debt buyers are notorious for using any means necessary to collect the debt, even when those methods violate the law. For the most part, they get away with violating the law because few people fight back. In order to protect your rights, you need to fight. This is where I can help. I can evaluate your case for free and advise you as to your defenses and claims.

Explaining the Difference between Hard and Soft Credit Pulls

The below is general information only. The information is not legal advice, and should not be treated as such and is subject to the legal disclaimer. This is a general article that explains the differences between hard and soft credit pulls or inquiries.

The FCRA does not expressly create a distinction between “hard” and “soft” credit inquiries or pulls. Rather, consumer reporting agencies classify every user’s request to see a consumer report as either a “hard” or “soft” credit inquiry, depending on the type of inquiry made by the requesting party.

As explained on the Credit Karma website, which is run by Trans Union:

There are two kinds of inquiries that can occur on your credit report: hard inquiries and soft inquiries. While both types of credit inquiries enable a third party, such as you or a lender, to view your credit report, only a hard inquiry can negatively affect your credit score.

What is a Hard Inquiry?

Hard inquiries occur when a financial institution, such as a lender or credit card issuer, checks your credit report when making a lending decision. For example, hard inquiries commonly take place when a consumer applies for a loan, credit card, or mortgage. You typically have to authorize a hard inquiry. Most important to note, hard inquiries will lower your credit score by a few points and remain on your credit report for two years. As time passes, the damage to your credit score will decrease until the hard inquiry falls off your credit report.

What is a Soft Inquiry?

Soft inquiries occur when a person or company checks your credit report as a background check, such as when a potential employer checks your credit, when you are “pre-approved” for credit card offers, and when you check your own credit score. A soft inquiry can occur without your permission. Soft inquiries may be recorded in your credit report, depending on the credit bureau, but they won’t affect your credit score in any way.

https://www.creditkarma.com/article/hard_inquiries_and_soft_inquiries (visited July 26, 2013) (emphasis added).

And is explained on the myfico.com[1] website,

Credit inquiries are requests by a “legitimate business” to check your credit.

As far as your FICO® score is concerned, credit inquiries are classified as either “hard inquiries” or “soft inquiries”–only hard inquiries have an affect on your FICO score.

Soft inquiries are all credit inquiries where your credit is NOT being reviewed by a prospective lender. These include inquiries where you’re checking your own credit (such as checking your score in myFICO), credit checks made by businesses to offer you goods or services (such as promotional offers by credit card companies), or inquiries made by businesses with whom you already have a credit account.

Hard inquiries are inquiries where a potential lender is reviewing your credit because you’ve applied for credit with them. These include credit checks when you’ve applied for an auto loan, mortgage or credit card. . . . A FICO score takes into account only voluntary inquiries that result from your application for credit. The information about inquiries that can be factored into your FICO score includes:

  • Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account.
  • Number of recent credit inquiries.
  • Time since recent account opening(s), by type of account.
  • Time since credit inquiry(ies).
  • A FICO score does not take into account any involuntary inquiries made by businesses with whom you did not apply for credit, inquiries from employers, or your own requests to see your credit report

 www.myfico.com/crediteducation/questions/inquiry-credit-score.aspx (visited July 26, 2013) (emphasis added).

 In sum, hard pulls or inquiries lower your credit score by a few points but soft pulls do not. If you have inquiries or other items on your credit report that should not be there, please give me a call or shoot me an email for a free consultation.

[1] “myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.” http://www.myfico.com/Guest_Home.aspx (visited July 27, 2013) (emphasis added).