How to Become a Debt Collector: A Comprehensive Guide

By Indeed Editorial Team

Published 25 October 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Debt collectors help individuals, agencies and companies by retrieving overdue payments that a debtor owes. Completing a tertiary education or traineeship is usually the most popular way of becoming a debt collector. Understanding the skills and responsibilities of a debt collector can help you prepare for a potential interview. In this article, we discuss how to become a debt collector and explore their relevant skills and responsibilities.

Related: Preparing for an Interview: How to Do it and Why it Matters

How to become a debt collector

Learning how to become a debt collector can help you plan your career path and steps. The most common pathway to enter a debt collection job is usually through a qualification or traineeship. It's sometimes possible to become a debt collector without any formal qualifications. Although, having qualifications generally increases your job opportunities. Through qualifications such as a Certification IV in Credit Management, you can expect to gain skills and knowledge in debt collecting, which can likely help you find work as a debt collector. Below you can find a step-by-step guide on becoming a debt collector:

1. Complete a traineeship

Completing a traineeship in credit management is generally the minimum requirement for debt collecting roles. The entry requirement for undertaking a traineeship in credit management is usually completing Year 10 at secondary school. Traineeships in credit management typically take one to two years to complete.

During your traineeship in credit management, you can expect to gain practical work experience and theoretical knowledge related to a debt collector's role. As a trainee, you may have involvement in a wide range of tasks and responsibilities under a manager. Upon completion of your traineeship, you're likely to receive a formal qualification in credit management, which can assist you in finding work as a debt collector.

2. Complete a certification or bachelor

Certifications and bachelor degrees are not always necessary for working as a debt collector. Nevertheless, completing tertiary education can show potential employers your dedication and commitment to the debt collection industry. Certifications such as a Certificate III in Investigative Services can provide you with skills, such as the ability to conduct effective research on a debtor's history. A Certificate III in Investigative Services typically takes six months to complete.

Bachelor degrees generally provide you with advanced levels of knowledge and skills in debt collecting. Bachelor degrees typically take three years to complete and include practical and theoretical studies. A bachelor's degree in finance, accounting or business management can provide you with a wide range of transferable skills that may help you find a career in debt collection.

3. Gain relevant licensing

The Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) are responsible for regulating the debt collection industry on a national level. The industry is also regulated on a state level by licensing authorities. Regulations and licences are a way of ensuring that, as a debt collector, you adhere to strict debt collection guidelines.

Depending on which state you intend to work as a debt collector in, you may require specific licensing. For example, suppose you're considering becoming a debt collector in Western Australia. In that case, you generally have to obtain a Debt Collectors Licence from the Department of Mines, Industry Regulation and Safety and meet an age requirement of at least 21 years old.

4. Apply for a debt collection role

When applying for the role of a debt collector, your work experience and qualifications in debt collecting can highlight your advanced skills and knowledge. Potential employers may be searching for candidates with extensive skills and experience. As a debt collector, you can expect to find work with a debt collection agency or with private clients. You can search for a career in debt collection using the Indeed Job Board.

When applying for the role of a debt collector, you may consider reviewing your resume to ensure it displays current information. Some of the details you may wish to include in your resume are your qualifications, skills and relevant work experience. Having an informative and well-structured resume can help your job application get noticed by potential employers.

What is a debt collector?

Debt collectors typically work for individuals, companies or debt collection agencies. Their primary purpose is to collect debts owed to their client. These debts can range from unpaid loans to overdue accounts. If a debtor can't make the payment request, a debt collector usually organises an alternative payment arrangement. The work environment of a debt collector is commonly in an office, but some cases may require the debt collector to visit the debtor in person.

The typical duties and responsibilities of a debt collector may include:

  • liaising with clients

  • locating debtors

  • requesting payment from debtors

  • creating a suitable plan for debtors who are not complying

  • investigating financial discrepancies

  • organising alternative payment arrangements

  • collecting payment from debtors

  • negotiating payment plans

  • handling client requests

Relevant skills of a debt collector

Debt collectors can benefit from a wide range of soft skills, which are essentially personality traits and social habits. Debt collectors communicate with people who may be upset, sad or angry. Having soft skills such as patience can help debt collectors to remain calm and professional. Below you can find some of the skills that may be relevant in a debt collection career:

Communication

Debt collectors typically contact debtors and make payment requests. Being able to communicate with debtors effectively can often ensure smooth and fair interactions. Practising good communication habits such as active listening and socialising outside of work attending can help you improve your communication skills.

Patience

Debt collectors may not always be able to collect an overdue payment straight away. Debtors are often in a position where they can't afford to pay their overdue accounts or loan. Collecting debts can sometimes take time and require a level of patience. Developing your organisational skills and reducing stress in your life might help to improve your patience.

Problem-solving

If a debtor cannot pay overdue payments, then a debt collector may create a payment plan with the debtor. These professionals can benefit from good problem-solving skills that allow them to plan effective debt collection strategies. You can improve your problem-solving skills by using techniques such as brainstorming and analysing different solutions.

Empathy

In some situations, debtors may be in a position of financial grief, which is why they are unable to pay their debt. Debt collectors require a certain level of empathy when working with debtors to ensure the debtors receive fair and respectful treatment. Becoming more self-aware, meeting new people and experiencing other people's hardships may help to improve your empathy.

Integrity

Debt collectors are usually subject to strict guidelines and laws, such as the Australian Consumer Law. Having a sense of integrity can assist debt collectors in adhering to standards of conduct. Examining your morals and ethics, telling the truth and surrounding yourself with honest people can help to improve your integrity.

Related: What Is Integrity? (Definition and Examples)

Debt collecting code of conduct

Debt collectors are typically subject to strict rules and regulations, ensuring that debtors receive fair treatment. The ACCC, ASIC and the Australian Consumer Law are typically the bodies that govern the debt collecting code of conduct. Consider researching the codes in your area to ensure you understand the regulations before beginning this career path.

A code of conduct can vary depending on your area. Common guidelines involve when and how debt collectors may contact people. For example, many debt collectors may only contact individuals from 7:30 a.m. to 9 p.m. on weekdays.

Related: 8 Code of Conduct Examples: A Workplace Guide

Frequently asked questions

Below you can find answers to some of the most frequently asked questions about a career as a debt collector:

How much do debt collectors get paid?

The average national salary of a debt collector is $57,425 per year. Depending on the company, agency or individual you work for, your salary may vary. There are similar roles to debt collection that may have a higher average national salary. For example, the average national salary of a collection agent is $62,581 per year.

Is debt collecting a good job?

The career that is best for you can depend on your passions, skills and interests. The role of a debt collector can have challenging moments that may require a specific set of skills to overcome. If you are patient, empathetic and have integrity, then you may enjoy the role of a debt collector.

Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location. Please note that none of the companies mentioned in this article is affiliated with Indeed.

Explore more articles