How to remove collections from your credit report?

Are you constantly being harassed by debt collectors? Are you worried that they’re going to sue you in court? If so, then you need to work on addresses the delinquent credit accounts you have. This means actively working to address collections, getting them removed if you can. How can you successfully remove a collections account from your credit report?

According to the government, you are entitled to an accurate credit report.

If you get calls regarding an unrecognizable debt, it may be one of two reasons for it:

The Consumer Federal Protections Bureau will help you to ensure you have a correct report, offering you information on how to successfully eliminate the wrong information in that report.

The first thing you need to do is get a copy of all three credit reporting bureaus, which you can do for free at AnnualCreditReport.com. Look over the reports and figure out which collections accounts are not yours.

After that, you can use the CFPB guidelines to help you to dispute the mistakes. You can use the Federal Trade Commission dispute letter example as guidance to write out your grievance.

Make sure to reach out to all three bureaus and give them as much information as possible.

Since it’s an exhausting process, you can always employ the services of a credit repair company to assist you. They can file the dispute letter and do the follow up for you. Once you’ve filed the dispute, you can use services such as Credit Sesame or Credit Karma to follow your credit.

Collection Accounts and Your Credit Score

If you have a collections account on your report, it can be difficult to remove them from a report. The majority of people are not successful in getting the original delinquent account scrubbed from their report. Thus, removing collection accounts from a credit report should be done with the intent to improve your score.

There are five parts to your credit score:

  • Payment History – 35 percent
  • Credit Utilization – 30 percent
  • Credit History Length – 15 percent
  • Credit Inquiries – 10 percent
  • Credit Types – 10 percent

If you have collections in your report, it does hurt the report’s payment history score. In order to avoid this, you need to pay all accounts you have on time. You also want to pay off the debt as quickly as you can. If there is extra money in your budget, focus on the delinquent accounts. But, bear in mind that just paying the collections off doesn’t improve your score. In order to increase your credit score, you must remove the collection accounts from the report altogether.

How Can You Successfully Address Collections On Your Report

If you have the money, consider getting the duplicate collection accounts off your report. It’s not uncommon with the buying and selling of old debt to see more than one instance of an account on a credit report. If this happens, you must dispute all instances of the debt.

You can use the CFPB rules to remove the information yourself. The FTC website has a great dispute letter example that you can use to develop your own letter. Make sure that any correspondence you send you save.

The original collection account stays on the credit report and can be removed if you negotiate with the creditor for its removal after payment.

Bear in mind that collectors purchase old debt for very little money. They want as much money as they can from you, so use that knowledge to your benefit.

Creditor Negotiations

When it comes to settlement negotiations, go for a settlement that’s less than 50 percent of the debt’s original amount. If you owe $4,000 on a debt, work toward a settlement of less than $2,000.

If the creditor agrees to the arrangement, ask them to remove the delinquent account. If you can, pay a little more to have this done.This is a win-win for both of you.

It can take seven years for a collections account to no longer affect your credit score. If a collection account is nearing the seven-year deadline, it may be best to let it just drop off instead of paying for it to be removed.

While it’s not always possible to negotiate for an item’s removal, time will ensure that the effect the collection account has is less and less on your credit score.

A Few Additional Things To Keep In Mind

All consumers have the right to a correct credit report. If you have mistakes in your report, reach out to the CFPB and FTC to help you remove the marks. There is no reason to have fraudulent or duplicate information in your credit file, especially if it’s a collections account.

Bear in mind that you have more rights than an accurate file. Debt collectors are limited by law in what they say and do. When you negotiate with these collections, they want as much money as they can get. If you can sweeten the deal, you can remove these collection accounts off your report.

Don’t forget that a good credit score comes from making smart credit choices. Be sure to pay your current debts before you turn your attention toward removing any collection account from the report.

Don’t become discouraged if a creditor refuses to remove a collection account off your report. It’s gone in seven years’ time anyway.

A secure credit card can help you to establish a good credit history. It is possible, even with a collection account in a credit report to have good credit. You just need to be proactive, pay your bills and be strategic in getting the collection accounts scrubbed from your report. Money speaks volumes when it comes to creditors.

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