If there’s a collection account on your credit report from a company known as AFS Acceptance, it’s likely you’ve defaulted on one of their loans.
AFS Acceptance is one of the most confusing collection agencies in the field, largely because they’re not a dedicated collection agency at all.
Instead, they are a direct lender of subprime auto and equipment loans.
If there are any issues in connection with the financing, they will act as a collection agent for their own loans.
What makes it even more confusing is that AFS Acceptance became Credito Real in the recent past.
For that reason, we’ll refer to the company as Credito Real/AFS throughout this article.
While covering the nature of the company’s subprime lending business is beyond the scope of this article, we will focus specifically on their collection tactics, and how you may be able to deal with them.
Is AFS Acceptance Legit?
AFS Acceptance is now known as Credito Real USA Finance, LLC; however, a collection account on your credit report could show up under either name.
The company is based in Fort Lauderdale, Florida, and opened for business in 1998.
The changeover in company name has itself been a source of confusion for consumers.
But, an even bigger complication may be the nature of Credito Real/AFS’s business.
The company provides financing for small, independent car dealerships through subprime lending.
They also offer subprime commercial landscaping equipment financing programs.
Subprime lending involves financing provided for consumers who can’t get credit from traditional sources, like banks and credit unions.
The company reports, “we financed deep subprime, chapter 7 and 13 bankruptcies, and no ITIN/SSN customers,” (the latter referring to undocumented aliens).
Though they work under the motto “Better Credit is a Better Life”—probably because they provide financing for those who can’t otherwise get it—the very nature of subprime lending puts the company at odds with many of its customers.
If a customer gets behind in his or her loan payments, or defaults on the debt entirely, Credito Real/AFS goes from subprime lender to collections agency for their own loans.
Company Ratings and Complaints
Credito Real/AFS has a Better Business Bureau rating of “A-”, which is one of the highest ratings on a scale running from A+ to F.
The company has been BBB accredited since 2005, so this is a legitimate company.
A total of 34 customer complaints have been filed with the agency in the past three years.
Complaints deal with misreporting of credit history, harassment, as well as disputes over payment amounts and due dates.
One complaint also indicated the company uses robo-callers.
Why Credito Real/AFS is Especially Difficult to Deal With on Your Own
We have to warn you upfront that dealing with collections connected in any way with auto loans is particularly difficult.
If you default on the loan, the company will threaten to repossess the vehicle.
After all, an auto loan is secured by the vehicle you purchase.
So, you can rest assured that the threat of repossession will be mentioned if you’re late on payments.
What’s more, even if your vehicle is repossessed, there will almost certainly be a deficiency balance, which is the difference between the outstanding loan amount and the value of the vehicle.
For that reason alone, collection balances can be high, often into several thousand dollars.
We can’t stress enough that while you may want to consider dealing with Credito Real/AFS on your own, you may be better served by getting professional help.
Auto loan credit issues are particularly difficult for consumers to deal with, so you may need to level the playing field by bringing in the professionals.
How to Deal with AFS Acceptance
Keeping in mind that dealing with Credito Real/AFS is likely to be considerably more difficult than would be the case with other types of collection agencies, we offer the following strategies for a do-it-yourself approach:
1. Do Not Communicate by Phone
If you’ve either fallen behind on your payments or you defaulted on your loan and have been assessed a deficiency balance, you’re probably being barraged by phone calls and letters from the company.
Our best advice is to avoid phone contact entirely. Those are exchanges you can’t possibly win.
Under federal law, you have the right to insist on communication by written correspondence, rather than by phone.
Take advantage of that right as soon as possible. In the meantime, don’t provide any information to Credito Real/AFS, nor make promises of payment.
As is typical with collection agencies, it’s almost certain your phone conversations with the company will be recorded.
In addition, collection agents are experts at getting you confused, intimidated, and more likely to provide additional information and payment promises that can be held against you if the company decides to pursue a judgment.
Make your first phone call your last, and insist on communication by written correspondence only during that conversation.
2. Communicate in Writing
Once again, this is your right under federal law. Written communication has many advantages over phone contact.
It’s much more difficult for a collection agency to harass you with written correspondence than it is by phone.
But, more important, written correspondence gives you the ability to limit the information you disclose to Credito Real/AFS.
That’s important because the less information you provide, the more difficult you’ll be making their job.
In all written communications with the company, you should primarily request information or terms, but supply as little as possible.
Use written communication to your advantage whenever possible.
And, be sure that any letters you send the company are sent by certified mail, return receipt requested.
This will not only prove you sent letters to the company when you did, but also that they were received.
3. Don’t Make a Promise To Pay
Make a promise to send a payment—or even infer that you will—and fail to follow through, and Credito Real/AFS can use that as evidence against you in a lawsuit.
They can assert that you made a fraudulent claim and win a judgment against you. If they do, they can garnish your wages and even your income tax refund.
Never, ever, make a promise to pay any amount of money to Credito Real/AFS unless you have both the willingness and financial ability to follow through.
4. Know Your Rights
The Fair Debt Collection Practices Act (FDCPA) provides consumers with certain protections from collection agency abuses.
You can learn these protections by reading the Debt Collection FAQs provided by the Federal Trade Commission (FTC).
Just knowing your rights under federal law may give you the upper hand when a collection agency starts getting ugly.
Get Professional Help to Deal with AFS Acceptance
By now, it should be obvious that dealing with Credito Real/AFS will be particularly difficult.
This is mainly because they’ll be attempting to collect the deficiency balance on an auto loan, which gives them the upper hand.
You may need to get professional help, and we recommend a good credit repair company.
They will not only be able to help you deal with the debt itself, but also to do the best job of salvaging your credit.
If, however, Credito Real/AFS threatens a judgment against you—which is highly likely with a deficient auto loan balance—you will need to get legal representation.
We recommend Lexington Law since the firm specializes in credit law and may keep the case from ever making it to court.
Specific Strategies for AFS Acceptance
Demand Debt Validation
Your first order of business in dealing with Credito Real/AFS is to demand a debt validation letter. This is also your right under federal law.
The letter must provide complete information on the debt, including the name of the original creditor, the date the account went into collection, the amount of the debt, and information that clearly connects you to the obligation.
The debt validation letter is the collection agency’s evidence that the debt is valid, and that it is your obligation.
But, if they either fail to provide the letter, or it comes back missing important information, you’ll have a right to dispute their claim.
We’ll go deeper on that dispute in a little bit.
Request a Goodwill Deletion
For now, let’s assume the debt that Credito Real/AFS claims you owe is legitimately yours.
This strategy won’t get you out of paying the debt, but it could make the collection account on your credit report go away.
To start the process, provide Credito Real/AFS with a goodwill letter.
In the letter, you’ll request that the agency delete the collection account from your credit reports as a goodwill gesture.
However, be aware that this strategy will only work if the debt is already paid.
In the letter, you’ll need to remind them that the debt is paid, but also provide a valid reason why the account went into collection.
That should include an extenuating circumstance, like a prolonged time of unemployment, a serious illness, a divorce, or the death of a loved one.
If you can supply documentation supporting your explanation, that will be even better.
It’s possible—but not guaranteed—that Credito Real/AFS will delete the collection account from your credit report.
Offer a “Pay-for-Delete” Agreement
This is probably the most speculative strategy in dealing with the collection account.
You’ll send Credito Real/AFS a pay-for-delete letter in which you’ll request that they delete the collection account from your credit reports in exchange for full payment of the debt owed.
They may or may not accept your request, but they’ll be motivated by the potential to collect the full amount of the debt.
If they do offer to cooperate, request they provide acknowledgment in writing.
But, understand that even if they agree in writing, they may not delete the collection account after you’ve made payment.
Pay-for-delete is not a legally enforceable arrangement, even if you have written correspondence from the collection agency.
But, it’s always worth a try.
Demand Deletion if They Can’t Verify the Debt
If Credito Real/AFS fails to supply a complete debt validation letter, you have the legal right to dispute their claim.
Your chance of success will be best if they’re attempting to collect a balance that’s already been paid, or if their pursuit of you is a case of mistaken identity.
You may need to prove both points, but if you can, you can invalidate the debt.
If you’re successful, you can demand Credito Real/AFS stop pursuing you for the debt and remove the collection account from your credit reports.
If they refuse, you can open a dispute with the three credit bureaus, which they will be required to investigate within 30 days.
If you can provide a copy of the incomplete debt validation letter (or claim that it was never supplied), as well as any evidence that either the debt was paid or it’s a case of mistaken identity, the credit bureaus will verify the information with Credito Real/AFS.
If your information checks out, the credit bureaus will delete the collection account from your credit reports.
However, that doesn’t necessarily mean Credito Real/AFS will stop pursuing you for the debt.
Collection efforts tend to be more difficult to stop when it comes to auto loans. If that’s the case, you may need to get professional help to finish the job.
Settle the Debt
This is a common way collection accounts are settled. The agency says you owe $X, but you offer to settle for something less.
If the company is anxious to close out the account, they may accept the arrangements.
But, you should fully expect they’ll counteroffer for a higher amount. There may be a series of negotiations until you finally settle on an agreeable amount.
If Credito Real/AFS agrees to settle the debt for less, send no money until you receive a letter from them confirming that they’ll accept the agreed-upon amount in full satisfaction of the debt, and will report the account as paid to all three credit bureaus.
(Unfortunately, settling an account for less than the full amount owed may stop the collection agency from pursuing you for the debt, but it will not remove the collection account from your credit report.)
However, it must be noted that this strategy is particularly difficult when it comes to auto loans.
They are, after all, secured loans, which means the lender will have the right to seize the vehicle in satisfaction of the debt.
And, if there is a deficiency balance—and there almost always is—it’s a very high possibility the company will pursue a judgment against you.
If they succeed, which is also very likely, you’ll not only need to pay the full amount of the debt, but also any legal costs added to the original balance.
While you can attempt to settle the account balance for less than the full amount, you’ll need to be fully prepared to detour to the next step—quickly—and get professional help.
We’re not going to sugarcoat this; collection accounts related to auto loans or any other type of secured debt are especially difficult to settle peacefully.