Financial Data Systems on Your Credit Report? Fight Back and Win

You’ve checked your credit report with one or more of the three bureaus, and you’re surprised to see Financial Data Systems reporting negative information, or maybe your first introduction to the company is getting phone calls. Regardless, your next question is probably why this company is contacting you or reporting negative information on your credit and what you can do about it.

The steps you take in dealing with Financial Data Systems are important because it can get worse without appropriately handling the situation. If you get a call or any form of communication from Financial Data Systems, you need to know your rights before you respond or take other action.

What Is Financial Data Systems?

Financial Data Systems is a third-party debt collection agency that operates in states like North Carolina, West Virginia, and Texas, among others. Financial Data Systems is also known by other names, including Fin Data Sys and FDSCredit.

As a third-party debt collector, Financial Data Systems never originates credit. This means people aren’t opening new accounts with this company. Instead, when someone opens an account with another company, and it becomes past due, that original creditor may hire a company like Financial Data Systems. 

Financial Data Systems works on a contingency basis, so they will try and collect debts on behalf of other companies. Then, if they’re successful, they charge a fee to the original creditor. 

Third-party collection agencies have to follow certain consumer protection laws. The two biggest ones are the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA).

Is Financial Data Systems a Scam?

Financial Data Systems isn’t a scam—they’re a legitimate debt collection company.

Why Is Financial Data Systems Calling Me (and Who Do They Collect for)?

When you get a call from Financial Data Systems, they are most likely contacting you because they believe you owe a debt. The company specializes in collecting for homeowner’s associations (HOAs), working with utility companies, and they do commercial collections.

Should You Pay Off Collections On Your Credit Report?

If you check your credit reports with the three primary bureaus and you see a collections account from Financial Data Systems, your first thought might be to just pay it, and then that will take care of the problem. It’s not always that simple, however.

First, you might not legitimately owe the debt. People are surprised at how often there is wrong information in their credit files. It’s important to find out whether or not the debt is even accurate before doing anything else.

Something else to consider is that there’s no requirement for a debt collector or credit reporting agencies to remove a collections account just because you paid it. It could stay on there and continue to affect your credit score.

You also run the risk of restarting the statute of limitations clock on a debt if you take any action without first talking to a consumer protection attorney.

A consumer protection attorney can go over your case and then help you decide what’s next, including, in many cases, submitting a dispute on your behalf.

If you assume you owe a debt and pay it, you’ll still be dealing with a lower credit score. There are even situations where people pay a debt collector, thinking it’ll stop their calls, only to continue getting them.

It’s always risky to pay something or even talk to a debt collector without first talking to an attorney.

What If I Think There’s a Mistake?

There are very often mistakes involving third-party debt collectors and credit reports. For example, maybe you did receive a service from an original creditor who Financial Data Systems is currently working on behalf of. They might not have the right information, though. You might have paid the debt, or your account, balance, or payment information could have mixed up with someone else’s.

Some mistakes occur with the original creditor and the information they send to a debt collector, but also with how information is sent to credit bureaus and reported. Mistakes on credit reports stem from situations like the following:

• Personal information gets mixed up.

If you check your credit report and something unfamiliar is listed there, it might be due to a mix-up in personal information. For example, maybe it’s someone else’s debt altogether, but they have a similar name or social security number to yours.

• A debt is incorrectly reported as charged off.

Charged-off debts are ones the original creditor has given up on trying to collect, but maybe you settled or paid it, and the information isn’t reported correctly.

• You’re an identity theft victim.

One of the reasons that it’s recommended every consumer check their credit reports with each of the three bureaus at least annually is to check for identity theft. Getting phone calls unexpectedly from a debt collection agency like Financial Data Systems can also indicate identity theft.

• Old debts are reported as new.

There’s a statute of limitations on negative information reported on your credit. The information is supposed to “fall off” after seven years, with the exception of some types of bankruptcy. You might find old information on your credit report that’s listed as new or should no longer be there.

Disputing a Debt with Financial Data Systems

Mistakes on the part of third-party debt collectors and on credit reports are incredibly common. Under the FCRA, you have the right to dispute anything wrong, whether it’s not your debt at all or is partially incorrect. Then, after the submission of a dispute, the company reporting this information is legally required to do a thorough investigation and remove anything incorrect.

While these are your consumer rights, it’s not easy to deal with debt collectors on your own. They’re frequently unresponsive, don’t correct wrong information, or talking to them directly can even worsen your situation.

Rather than risking any of these things, contact Fair Credit. Our FCRA consumer protection attorneys can help you navigate your specific situation with Financial Data Systems so they’re no longer affecting you financially or contacting you. We offer free case reviews, so reach out.