A debt buyer is a company that buys unpaid debts, usually charged-off accounts, from the original creditor or another buyer and then tries to collect them. Debt buyers often report the debt to the credit bureaus as a collection account under their own name.
Also called: debt purchaser, junk debt buyer, purchased debt, debt buying company, account purchased
What it means
When a creditor gives up on collecting a debt, it often charges it off and sells it. The CFPB’s 2023 report on collection reporting describes debt buyers as companies that buy portfolios of charged-off debt from creditors and keep everything they collect. That is different from a contingency-fee collection agency, which collects for the creditor and keeps a percentage. Debts are often resold, so one account can pass through several buyers. Some well-known debt buyers include Midland Credit Management, Portfolio Recovery Associates, and LVNV Funding.
The CFPB’s debt collection glossary lists “debt buyers” among the other names for debt collectors, and a debt buyer that collects may have to follow the Fair Debt Collection Practices Act as well as the FCRA.
How debt buyers show up on credit reports
The buyer usually reports the debt as a collection account in its own name. The CFPB’s 2023 snapshot found that debt buyers mostly report financial and retail debts, and that the number of collection tradelines they report grew 9% from 2018 to 2022 while overall collection reporting fell.
What should stay the same after a sale
- The delinquency date. A buyer must report when the delinquency began (15 U.S.C. § 1681s-2(a)(5)(A)), and it is treated as complying when it reports the same date of first delinquency the original creditor reported (§ 1681s-2(a)(5)(B)). The FTC’s 2011 staff report says the sale of an account does not change the reporting period.
- The original creditor. The reporting format has a place for the original creditor and for accounts bought and sold, so the bureaus can link the debt to the original account.
- One balance, not two. The CFPB’s 2012 report explains that if the buyer omits the original creditor, or the seller does not show the account as sold, the debt can appear twice.
Common errors
- A later delinquency date than the original account (re-aging).
- A balance that includes interest or fees you never owed.
- The debt reported by two buyers at once, or by the buyer and the original creditor.
- A debt that belongs to someone else with a similar name.
- A debt that was paid or settled with the original creditor before the sale.
How to dispute it
Dispute in writing with each bureau and directly with the buyer. Ask the buyer to identify the original creditor and account. Include any sale notice, settlement letter, or proof of payment.
When it can be an FCRA violation
Debt buyers that report to the bureaus are furnishers. They must report accurately, carry forward the right delinquency date, note disputes, and investigate disputes the bureaus forward (§ 1681s-2). A debt buyer’s account that is wrong and still verified after a dispute can support an FCRA claim.
If a debt buyer’s account is still wrong after you dispute it, FCRA Attorneys offers a free case review, and you pay no fee unless we win.
Related
- Collection account
- Original creditor
- Transferred or sold
- Date of first delinquency
- Re-aging
- Charge-off
- Furnisher
- Midland Credit Management guide
- Portfolio Recovery Associates guide
- LVNV Funding guide
- Jefferson Capital guide
- Cavalry guide
- Charged-Off Account Still Showing a Balance? When It's Accurate and When It's Not
- How to Dispute Credit Report Errors With Equifax, Experian and TransUnion
Sources
- CFPB, Market Snapshot: An Update on Third-Party Debt Collections Tradelines Reporting (2023)
- CFPB, Key Dimensions and Processes in the U.S. Credit Reporting System (2012)
- CFPB, Debt collection key terms
- 15 U.S.C. § 1681s-2, responsibilities of furnishers (Cornell LII)
- FTC staff report, 40 Years of Experience with the Fair Credit Reporting Act (2011)
Updated November 2026. This glossary is written by FCRA Attorneys from public sources. It is general information, not legal advice, and is not affiliated with any credit bureau or industry association.