What is ERC Collections and why is it on my credit reports?

Man looking on his cellphone to see why erc collections is on his credit reportsImage: Man looking on his cellphone to see why erc collections is on his credit reports

In a Nutshell

ERC Collections is a debt collection agency. If you’ve seen ERC Collections on your credit reports and aren’t sure why, you may owe money on a past utility bill, bank account or student loan.
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ERC Collections is a debt collection agency representing a wide range of creditors.

If you’ve seen ERC Collections on your credit reports or the company is contacting you, it might be trying to recover a debt on behalf of a utility company, a bank or financial institution, or a student loan lender, among others.

What is ERC Collections?

ERC Collections, also known as Enhanced Recovery Company or Enhanced Resource Centers, works on behalf of other companies or banks to collect on debts people have defaulted on.

You may have seen ERC Collections listed on an account that went to collections after your original account got charged-off. In some cases, you won’t see ERC Collections on your credit reports even if the company has contacted you about an account.  

There are a number of possible reasons — legit and not — for getting a collections call that you don’t recognize from your credit reports. So whatever the situation, the first thing you should do after you’re contacted by a debt collector is make sure that the debt is yours — and that the debt collector is entitled to collect on that debt.

Dealing with a debt collector can be stressful and intimidating, and the extra layer of confusion about whether a debt collection agency is legit or not just can add to the stress. But don’t let that stop you from standing up for your rights when it comes to debt collection, as laid out by the Fair Debt Collection Practices Act.

To determine whether the debt is legitimate, ask the debt collector to provide written proof. This must include: the debt collector’s information, the amount you owe plus any additional fees, what the debt covers, and the name of the original creditor.

How to remove ERC Collections from your credit reports

If you’ve determined that you don’t owe a debt that ERC Collections is trying to collect on, you should reach out to the three major consumer credit bureaus to dispute the debt.

Once you file an official dispute, the credit bureaus are obligated to investigate. They’ll also forward information you send them to the debt collection agency, which will be required to report any inaccuracies it finds to all three of the credit bureaus.

Keep in mind that you often have only 30 days to respond to initial contact by a debt collector to request key information regarding the debt — so time is of the essence.

If you’re looking for additional support, the Consumer Financial Protection Bureau has resources including letter templates you can use to deal with common issues that come up with debt collectors.

Next steps: What to do if there’s an account you don’t recognize on your credit reports

Finding out that you have an account in collections could be an unwelcome surprise. If the debt is legitimate, it will take seven years, plus 180 days from whenever you missed your first payment, for the derogatory mark to fall off your reports. But there are steps you can take to build your credit back up.

If the debt isn’t legitimate, you’ll want to keep a close eye on your credit. To help spot potential identity theft early and flag other mistakes, it’s a good idea to check your credit reports regularly. You can periodically access free credit reports on annualcreditreport.com.

About the author: Romy Ribitzky is a senior editor at Credit Karma specializing in autos, auto insurance, credit, personal loans, savings and tax. Romy is an Edward R. Murrow Award–winning journalist and a marketing leader, having hone… Read more.