How to remove collections from your credit report

According to the Consumer Financial Protection Bureau, more than one in four consumers in 2018 had debt in collections—and it’s safe to assume that resolving this situation is the top priority for people in it. Whether you’re responsible for the debt or not, one thing all collections have in common is that they negatively impact your credit.

How you go about removing negative items heavily depends on whether the collections are accurate or inaccurate. If the negative marks are inaccurate, you should dispute them. If they’re legitimate, you can try to negotiate with agencies to get them removed.

When your debt is sent to collections, you’ll be repeatedly contacted to try and get it paid. A debt is sent to collections when your account goes unpaid—typically 180 days after becoming delinquent—so creditors give up trying to recover the money and send it to a collection agency. A debt the creditor sees as unlikely to get paid off is commonly referred to as a charge off.

Once your account is in the hands of a debt collector, the third-party agency does what it can to get the owed money back. This includes contacting you in what feels like every way imaginable. That’s right, a debt collector can contact you by phone, letters, emails or text messages to get the money back. This is likely why the word “debt collector” is synonymous with stress and anxiety for the majority of Americans.

A collection can hurt your credit pretty severely and is a major warning sign to creditors not to lend to you. Collections can stay on your report for seven years after they’re first reported. It’s hard to put an exact number to it because other factors will influence the drop, like how recently the collections were on your account.

The good news: Knowledge is power. Along with the fact that there are regulations for how debt collectors can contact you, there are also resources to help you take control of your credit. Let’s dive in to what to do next.

Step 1: Gather information

If you find yourself being contacted by collection agencies, don’t panic—prepare.

The first step is to ask yourself what’s being reported by the three major credit bureaus and get copies of your credit report.

The key here is to make sure to get a report from all three major credit bureaus: Experian®, TransUnion® and Equifax®.

Debt collectors aren’t required to report the account to all three of the credit bureaus. So, if you’re not covering your bases, you might miss a collection on your report. You should also compile your records of the account in question to cross-check the information and assess what’s being reported.

Start by checking the following common errors found on credit reports:

Account number
Balance
Credit limit
Dates the account was opened and closed

Request a debt validation letter

You will have 30 days from when the debt collector first contacts you to get the debt validated. It must be done in writing, which is why you’ll need to write a debt validation letter.

Once the letter has been sent, the collector must provide proof of the debt to continue collection efforts. If the collector can’t provide proof or doesn’t respond within 30 to 45 days, the debt must be removed from your report by the credit bureau. You can also dispute the collection after it is aged off.

Once you have your reports and documentation, it’s time to determine the appropriate plan of action. If you find inaccuracies, it’s time to dispute them.

Step 2: Dispute inaccuracies

So what does inaccurate mean? Well, errors on your credit report are unfortunately more common than we’d like to think, like a collection that doesn’t even belong to you, a debt that’s aged out or an account that you’ve paid that’s not being properly recorded on your report.

When disputing erroneous collections—and especially before getting started—it’s important to verify who is reporting the error on your account. This will inform how you move forward with getting it removed. It’s coming from either the original creditor or the debt collector.

If you believe the collection on your report is an error made by the credit bureau, you have a right to dispute it with a dispute letter. You’ll put in writing the items on your report you’re disputing, why you’re disputing the information and your request for it to be removed or collected.

Send your letter through certified mail with a return receipt requested. This way, you’ll have a record of when the credit bureau received it. The bureau will have 30 to 45 days to validate it. If they can’t, the item should be removed from your report.

Step 3: Remove accurate collections on your credit report

If you’re wondering if collections go away after you pay, the answer is no. However, the collections will show up as being paid on your credit report, and a paid account looks a lot better than one that’s left delinquent.

To remove accurate collections from your credit report, you may be able to request a paid account be removed from your report with a goodwill deletion, or you can write a pay for delete letter for an account you’re willing to pay off.

Write a goodwill deletion letter

A goodwill deletion is a request sent to your original creditor or a debt collector to remove the negative item out of goodwill. This option is best for accounts that you’ve already paid. You might be able to guess how you’re going to request this—another letter.

Write to the collector explaining your situation. Include the reason why you’d like the collection removed. It’s not a guarantee that this will help, but it doesn’t hurt to ask, especially if you’re about to make a big financial move like applying for a mortgage.

Write a pay for delete letter

With a little negotiation, collection agencies may remove the collections from your account. Another way to go about this is with a pay for deletion letter. This letter is a written request to the collection agency asking them to remove the negative marks on your report in exchange for compensation.

How to improve your credit score

Once you’ve settled the collections on your credit report, your credit score could likely use a boost. This won’t happen overnight, and it will take time to get things back on track. A few things to keep in mind:

Pay your debts on time and in full
Don’t open too many new lines of credit at once
Don’t close old lines of credit, like old credit cards
Keep your credit utilization low

Credit health is important for so many aspects of your life and should be taken care of. When it comes to rebuilding your credit, our team can help you get the ball rolling. Contact us for a consultation today.

It’s not a guarantee that this will help, but it doesn’t hurt to ask. Especially if you’re about to make a big financial move like applying for a mortgage.

Write a pay for delete letter

With a little negotiation, collections agencies may remove the collections from your account. Another way to go about this is with a pay for deletion letter. This letter is a written request to the collections agency asking them to remove the negative marks on your report in exchange for compensation.

If you still have questions about the collections on your credit report, it might be time to contact us. Don’t hesitate to reach out. We’ll work with you to check, challenge and change your credit score.