When faced with outstanding debt, you might wonder whether you should pay the debt collector or the original creditor. Understanding the differences between these two options and knowing the best course of action can help you manage your debt more effectively and protect your credit score. Here’s a comprehensive guide to help you decide who to pay when handling your debt.

Understanding the Difference: Debt Collectors vs. Original Creditors

Original Creditor

The original creditor is the company or financial institution that initially extended credit to you. This could be a bank, credit card company, or any lender who provided you with a loan or credit line.

Debt Collector

A debt collector is a third-party agency that the original creditor hires or sells your debt to when you fail to make timely payments. Debt collectors are responsible for recovering the amount owed on behalf of the original creditor or for themselves if they purchased the debt.

Pros and Cons of Paying the Original Creditor


  1. Potential for Better Terms: The original creditor may offer you a payment plan or settlement that is more favorable than what a debt collector would offer.
  2. Avoiding Additional Fees: Paying the original creditor can help you avoid extra fees and interest that debt collectors might add.
  3. Credit Report Benefits: Settling the debt with the original creditor may result in a more favorable entry on your credit report compared to dealing with a debt collector.


  1. Limited Time Frame: Once the debt is sold to a collector, you may no longer have the option to pay the original creditor.
  2. Persistence Needed: You might have to negotiate more persistently to get favorable terms from the original creditor.

Pros and Cons of Paying the Debt Collector


  1. Clearing the Debt: Paying the debt collector can help you clear the debt from your record, stopping further collection actions.
  2. Possible Settlements: Debt collectors may be willing to settle for less than the full amount owed, allowing you to pay off the debt at a reduced rate.


  1. Additional Costs: Debt collectors might add fees and interest, increasing the total amount you owe.
  2. Credit Report Impact: Settling with a debt collector can result in a negative entry on your credit report, such as “settled for less than owed,” which can hurt your credit score.

Steps to Take Before Deciding Who to Pay

1. Verify the Debt

Before making any payments, verify that the debt is legitimate. Request a validation notice from the debt collector, which should include details about the debt, the original creditor, and the amount owed.

2. Contact the Original Creditor

If the debt is legitimate, contact the original creditor to see if they are willing to accept payment and remove the debt from collections. This can sometimes result in better terms and a positive outcome for your credit report.

3. Negotiate a Settlement

Whether dealing with the original creditor or a debt collector, try to negotiate a settlement. Aim to pay a reduced amount in exchange for the debt being marked as “paid in full” on your credit report.

4. Get Everything in Writing

Ensure that any agreement you reach is put in writing. This protects you from future disputes and provides a record of the agreed terms.

5. Understand the Impact on Your Credit

Be aware of how your decision will affect your credit report. Paying the original creditor can be more beneficial to your credit score than paying a debt collector, but this depends on the terms agreed upon.


Deciding whether to pay the debt collector or the original creditor involves considering various factors, including the terms offered, the impact on your credit score, and the legitimacy of the debt. Always verify the debt, contact the original creditor first, and negotiate terms that work in your favor. By taking these steps, you can manage your debt more effectively and protect your financial health.

By following this guide, you’ll be better equipped to make an informed decision and take control of your debt situation, ultimately leading to improved financial stability and a healthier credit score.

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