My FICO logo $$$$$$$$$$$ 9876 5432 1234 5678 CREDIT CARD KELLY SMITH 11/26 My FICO logo
SCORE
Skip Navigation
  • Why FICO
  • How It Works
  • Pricing
  • Education
  • Community
  • Support
  • Member Dashboard
  • Log In Log Out
  • Start Plan
 
  • Why FICO
  • How It Works
  • Pricing
  •  
  • Education
    • Credit Education
    • Credit Scores
    • What Is a FICO Score?
    • FICO Scores vs Credit Scores
    • FICO Scores Versions
    • New FICO Scores
    • How Scores Are Calculated
    • Payment History
    • Amount of Debt
    • Length of Credit History
    • Credit Mix
    • New Credit
    • How to Improve Your Score
    • How to Build Credit
    • Credit Reports
    • What's in Your Report
    • Credit Bureaus
    • Inquiries
    • Errors on Your Report?
    • Blog
    • Calculators
    • Loan Savings
    • Vehicle Payments
    • How Much Can I Borrow?
    • Should I Consolidate My Credit Cards?
    • Know Your Rights
    • Identity Theft
    • FAQ
    • Glossary
  • Community
  • Support
  • Member Dashboard
  • Log In Log Out
  • Our Products
    • Ongoing Credit Monitoring Track your FICO® Score & identity
    • One-time Credit Reports Be prepared for important transactions
  • How Can We Help
    • Monitor Credit & Identity
    • Mortgages
    • Credit Cards
    • Auto Loans
  • Credit Education
  • Community
  • Support
  • Our Products
    • Ongoing Credit Monitoring Track your FICO® Score & identity
    • One-time Credit Reports Be prepared for important transactions
  • Credit Education
  • Credit Scores
    • What Is a FICO Score?
    • FICO Scores vs Credit Scores
    • FICO Score Versions
    • New FICO Scores
    • How Scores Are Calculated
    • Payment History
    • Amount of Debt
    • Length of Credit History
    • Credit Mix
    • New Credit
    • How to Improve Your Score
    • How to Build Credit
  • Credit Reports
    • What's in Your Report
    • Credit Bureaus
    • Inquiries
    • Errors on Your Report?
  • Blog
  • Calculators
    • Loan Savings
    • Vehicle Payments
    • How Much Can I Borrow?
    • Should I Consolidate My Credit Cards?
  • Know Your Rights
  • Identity Theft
  • FAQ
  • Glossary
View all FICO Scores & Credit Reports articles

Beware of Parked Debts on Your Credit Report

Debt parking is when a collection agency secretly places an account on your credit report, hoping you're pressured to pay because of a pending application.

Your credit report isn't a parking lot, but that doesn't stop dishonest collection agencies from treating it like one. Some collection agencies quietly place accounts on your credit report, giving you no warning, hoping you won't notice until you're in the middle of a major loan or job application.

Under pressure, you're more likely to pay up without question, so the debt doesn't keep you from closing on your home, purchasing your car, or getting the job. Parked debts may not be legitimate, and you could be paying for a debt that's not yours, has already been paid, is outside the legally collectible time period, or is inflated beyond what you originally owed.

Just how bad is debt parking? The Federal Trade Commission recently took action against a debt collection agency that placed close to $100 million worth of fake or questionable accounts onto consumer credit reports and collected more than $24 million. This tactic, known as "debt parking," violates debt collection and credit reporting laws.

Debt parking isn't new. In 2014, the National Consumer Law Center recommended some ways the Consumer Financial Protection Bureau (CFPB) could help consumers deal with this unfair collection practice. The recent FTC action is the first of its kind but hopefully not the last.

Signs a Debt Has Been Parked on Your Credit Report

Since debt parking involves collectors covertly placing debts on your credit report, catching this sneaky tactic means being more diligent about monitoring your credit. An unexpected drop in your FICO® Score may be the first clue that a debt has been added to your credit report, especially if you've been making your monthly payments on time and you haven't taken on any new debts. Collection accounts have a big impact on your credit, and your FICO Score can tumble if a new one is added to your credit report.

This shows why it's so important to check your FICO Score regularly. A significant drop in your score is a sign to inspect your credit report closer for suspicious accounts. Without keeping track of your credit, you may not realize a fake collection account has been placed on your credit report until you apply for a mortgage, car loan, or job and your application is denied.

What Are Your Options?

Be cautious with all debt collection accounts, even if the debt seems familiar. Dig deeper to verify the debt belongs to you, that the amount is correct, that it's within the timeframe for legal collection, and the collector has the right to collect on it.

The Fair Debt Collection Practices Act gives you the right to request this proof, in writing, from a debt collector. If the collector can't cough up adequate proof of the debt, they must stop collecting on it. That includes listing the debt on your credit report.

The Fair Credit Reporting Act gives you the right to dispute inaccurate information that appears on your credit report. The reporting credit bureau is required to investigate the dispute and remove the account if the collection agency doesn't verify the debt belongs to you.

In addition to monitoring your FICO® Score, check your credit reports from the three major credit bureaus before applying for a loan or job. This way, you can verify the information and clear up inaccuracies before you're in the middle of the application process, where the stakes are much higher.

LaToya Irby

LaToya Irby is a financial writer with over 14 years of experience. She's been quoted and published as a credit expert in several major publications including USA Today, U.S. News and World Report, TheBalance.com, and The Chicago Tribune.

Estimate your FICO Score range

Answer 10 easy questions to get a free estimate of your FICO Score range

740 - 790
Estimate for Free

Instant Access to Your FICO® Score

90% of Top Lenders Use FICO® Scores. Do you know yours?

Get Access Now!

Page footer

Products

  • Home
  • Why FICO
  • How It Works
  • Pricing

Learn

  • Education
  • Community
  • Support
  • Blog

Company

  • About Us
  • Terms of Use
  • Privacy Policy
  • Affiliate Program
  • Accessibility

Get Our App

  • Download iOS app on the App Store
  • fil_get
    Get Android app on the Google Play Store

Follow Us

  • Twitter
  • Facebook
  • Instagram

Credit Education

  • Credit scores
  • What is a FICO Score?
  • FICO Score versions
  • How scores are calculated
  • Payment history
  • Amount of debt
  • Length of credit history
  • Credit mix
  • New credit
  • Credit reports
  • What's in your report
  • Bureaus
  • Inquiries
  • Errors on your report?
  • Calculators
  • Know your rights
  • Identity theft
  • FAQ
  • Glossary

Copyright ©2001- Fair Isaac Corporation. All rights reserved.

IMPORTANT INFORMATION:

All FICO® Score products made available on myFICO.com include a FICO® Score 8, and may include additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Scores and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.

PRIVACY NOTICE: When you visit this website we collect your browsing activities on our site and use that information to analyze and research improvements to the website, and to our products and services. When you register for our products and services, we also collect certain personal information from you for identification purposes, such as your name, address, email address, telephone number, social security number, IP address, and date of birth. Further information is available in our FICO Data Privacy Policy. For visitors with visual disabilities, access to this website, including our FICO Data Privacy Policy, is available through assistive technologies, such as BrowseAloud, JAWS, VoiceOver, Narrator, ChromeVox, and Window-Eyes. More details on software and accessibility are available at WebAIM.org.