How to Remove Collections from Your Credit Report

·12 min read
Money; Getty Images
Money; Getty Images

How to Get Collections off Your Credit Report

Getting collection activity off your credit report can help you accomplish credit goals like improving your score or qualifying for certain types of loans. Though there’s no one way to remove collections or guarantee you’ll get the exact outcome you are hoping for, it’s still good to know how to remove this information from your credit report whenever possible.

The good news is that it’s possible to remove this derogatory information, so here’s exactly what you need to know about removing collections from your credit report.

Table of contents

  • Check your credit report thoroughly

  • If you find an error in your report, dispute the collection

  • If you don’t find any errors, ask the agency to validate the debt

  • If the collection hasn’t been paid, continue paying on time

  • If the collection has been paid, send a goodwill letter to the agency

  • If that fails, wait for the collection to drop off your report

  • As an alternative, hire a credit repair company

How to get collections off your credit report

This guide will walk you through the steps of removing collection accounts from your credit report.

Check your credit report thoroughly

If you start getting calls or notices about bills that are past due and missed payments, it might mean these delinquent accounts and unpaid charge-offs have been reported to the major credit bureaus and now appear on your credit report. In this case, the very first thing you need to do is check your credit report thoroughly. Fortunately, it’s now very easy to get access to your free credit report online.

If you don’t know how to get a credit report, then you can always request it each year, at no charge, at annualcreditreport.com. Knowing how to read your credit report is a helpful skill you can learn in a few moments. When checking for negative accounts, jump to the “credit history and accounts” where you can find information on missed or late payments.

In some cases, these accounts may have been sent to collections. You can always call the creditor listed to find out if you can bring it current through them or if you have to deal with a collections agency they may have turned the account over to.

The next place to examine is the “negative information” section. It may also be listed as “public records.” This section contains everything that can lower your credit score like bankruptcies, foreclosures, charge-offs, delinquent payments or repossessions.

It’s important to go through this information for accuracy. If you find anything reported incorrectly, you can take steps to update or remove the information.

How to identify collection account errors in your credit report

If you see any information in these sections that are not accurate, you have a legal right to dispute them. Common errors you might find include:

  • Someone else’s information appearing on your credit report by mistake

  • The debt is over 7 years old

  • Incorrect data points on amounts and other activities like delinquency, date opened, balance, etc.

  • Negative items that should have been removed by law, like paid off medical bills

If you find an error in the report, dispute the collection

Errors on your credit report can be removed or corrected. In most cases, you have to initiate this process. For incorrect information, you can file a dispute with the credit bureaus to have the accounts investigated. Your dispute letter should include:

  • Your contact information: Complete name, address, and telephone number

  • A clear list of each mistake with account numbers

  • An explanation as to why and how the information is incorrect

  • An explicit request for the information to be removed or corrected

  • A copy of your credit report with the erroneous items highlighted

  • Supporting documentation proving how the information should be reported

There are many ways you can contact and dispute items on your credit report. The Consumer Protection Bureau’s guide on disputing credit report errors contains the following directory of each the credit reporting agency (CRAs) and where to send disputes:

Equifax

Online: www.equifax.com/personal/credit-report-services/credit-dispute/

By mail: Download the dispute form

Mail the dispute form with your letter to:

Equifax Information Services LLC

P.O. Box 740256

Atlanta, GA 30348

By phone: Phone number provided on credit report or (866) 349-5191

Experian

Online: www.experian.com/disputes/main.html

By mail: Use the address provided on your credit report or mail your letter to:

Experian

P.O. Box 4500

Allen, TX 75013

By phone: Phone number provided on credit report or (888) 397-3742

TransUnion

Online: https://service.transunion.com/dss/login.page?dest=dispute

By mail: Download the dispute form

Mail the dispute form with your letter to:

TransUnion LLC

Consumer Dispute Center

P.O. Box 2000

Chester, PA 19016

By phone: (800) 916-8800

According to the Fair Credit Reporting Act (FCRA), credit reporting agencies (CRAs) and furnishers (creditors) must investigate and respond to disputes within 30, and sometimes up to 45, days of receiving your credit report dispute. If the information is found to be correct, then it will remain on your report. Otherwise, it will be removed or updated.

If you don’t find any errors, ask the agency to validate the debt

In many circumstances, debts can get shuffled around from one third-party debt collector to another, sometimes several times over. It’s not uncommon for inaccuracies to get transmitted to the debt collection agency. Also, documents verifying the original debt can get lost, too.

Once a debt ends up in collections, and you start to get communications about owing the debt, it’s totally acceptable to ask the debt collector to verify that the debt is valid and actually belongs to you.

Here’s the information you should include in your request to validate the debt:

  • Information about the original creditor and the original account

  • Amount and age of the debt

  • Supporting documentation like an original invoice, bill, promissory note or similar document to prove the debt’s validity

  • Why the agency believes you owe the debt

  • Whether or not they are licensed to collect debt in your state

Note, once you send the debt collector a written dispute or a written request to validate the debt within 30 days, they have to pause collecting the debt until they respond to your dispute or answer your request.

If the personal information attached to the debt, like your name, aliases, phone number, address, etc., cannot be accurately matched with the debt, it must be removed from your credit report. Also, if they cannot provide any proof the debt is valid, it must also be removed from your credit report.

Another tactic along these lines is to ask credit reporting agencies to correct any inaccurate information. So if you find any mistake in relation to the collection account regarding any data point, you can ask the CRA to update it. Like asking for validation, if the item is not updated in a timely manner, it must be removed.

If the collection hasn’t been paid, continue paying on time

Assuming the steps above don’t work, then you want to take measures to prevent further damage to your credit score. You will need to continue paying the debt until the creditor responds to your validation request or until you’ve paid the entire balance off.

Chances are, you don’t have much room in your budget to make extra payments on a debt you didn’t expect to go to collections in the first place. In this case, try to make a payment arrangement with the creditor. Pay as much as you can with the frequency that work for your budget.

To make sure the collector doesn’t violate any part of the Fair Debt Collection Practices Act (FDCPA) ask them to put the payment agreement in writing. Then, be sure to pay according to the agreement.

Also, avoid giving any debt collector direct access to your debit or credit card or even your bank account, as they could withdraw more money than you agree to. Make your payment by check or money order. In some cases, you may be able to pay online.

If the collection has been paid, send a goodwill letter to the agency

Even if the collection has been paid, the unpaid collection and the record of collection activity can stay on your credit report and have a negative impact for up to 7 years. Some lenders will consider this derogatory information based on the credit scoring models they use or in their underwriting process, which could negatively affect your borrowing applications.

Even with a valid, paid collection account, there’s still a chance you can get it removed, and some FICO score and Vantage score models will ignore a collection that’s marked as paid. You can write a letter asking the creditor or collector to remove this information as a goodwill deletion. Your goodwill letter doesn’t need to have a lot of information or details. Simply identify the debt, and point out that it has been paid and that you’d like them to remove it.

The debt collector is not obligated to remove factual, verified information from your credit report, although some will as a courtesy. If this method works, be sure to get written communication from the agency saying they have notified credit bureaus to remove any reference to the delinquent account from your history. This way, you can present this to the credit bureaus in case the agency doesn’t push the update to all CRAs.

If that fails, wait for the collection to drop off your report

Generally speaking, negative information is removed from your credit report after seven years. The clock starts from the first date your delinquent accounts are reported. This means if you miss one or more payments, then the account is sent to collection, the “late payment” information will be removed seven years after the first date of delinquency, not when it gets to collections.

Be aware, however, that just because a debt disappears from your credit report doesn’t mean you don’t have to pay it. If it’s not past the statute of limitations or the time frame when a creditor can sue you for a debt, then a creditor still has the right to pursue payment and even take you to court to recoup it.

Each state has its own laws that govern the statute of limitation on debt. Make sure you understand your responsibility to pay old debts based on your state’s laws. If necessary, seek counsel from a lawyer to make sure you are compliant with your debt obligations and will not end up paying more than required.

Should you negotiate a pay-for-delete agreement?

In some cases, you can negotiate what is called a pay-for-delete arrangement. With pay-for-delete, you pay all or a portion of the debt in exchange for the collection agency removing the account from your credit report.

This arrangement can be successful, but you should proceed with caution. Capture the agreement in writing (which some collections agencies are hesitant to do) and also make sure they will remove both the late payment information and the collection account. Pay-for-delete can work sometimes, but the practice is not as common because creditors are technically supposed to report accurate information to CRAs.

As an alternative, hire a credit repair company

Credit repair companies may help you remove negative information from your credit report, but it can be a costly service. Although you can pretty much do the same thing they can, hiring a service can save you time and potentially get better results. Plus, the credit repair company may have insight into additional personal finance tips and strategies to help boost your credit score even further.

If you go this route, make sure that you’re dealing with a reputable company that uses effective, nonfraudulent ways to remove items from your credit report. Check sites like the Better Business Bureau, Trustpilot, the Consumer Financial Protection Bureau (CFPB) or Google Reviews to make sure the services don’t engage in unethical, shady practices around credit repair.

How to remove collections from your credit report FAQ

How do collection agencies work?

Collections agencies buy debt from creditors, usually at a discount. Once a licensed debt collection agency owns this debt, they can attempt to collect the debt from you and report activity on the account to credit reporting agencies.

How long do collections stay on your credit report?

Negative information and payment history can stay on your credit report for up to seven years. Bankruptcy can stay on your credit report for 7 to 10 years. While these don't automatically result in bad credit, they can and do knock points off your score and discourage future lenders from considering you.

How much do collections affect your score?

Although there's no formula to calculate how much a collections account affects your credit score, it's important to know there is little difference between a paid collection account and those that remain unpaid regarding your credit score.

In fact, paying old collections accounts can activate them again and further impact your score. If you want to remove a collections account for the purposes of borrowing, check with your lender to find out the best approach for your loan approval.

The type of debt does play a part in how it affects your score. Medical collections, for instance, are given less weight in the latest FICO scoring models.

Summary of Money’s guide for removing collections from your credit report

You can remove a collections account from your credit report with a few different methods. Though removing a collections account from your credit can be helpful, there’s no guarantee that it will work or have the results you are expecting. If you decide this is the route you want to go, here’s a quick recap on how to remove collections from your credit report:

  1. Check your credit report thoroughly

  2. If you find an error, dispute it

  3. If you don’t find any errors, ask the debt collector to verify it

  4. If the collection hasn’t been paid, continue paying on time

  5. If the collection has been paid, send a goodwill letter to the debt collection agency

  6. If that fails, wait for the collection to drop of your credit report

  7. Hire a credit repair company as needed

 

 

 

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