How to Remove Collections from Your Credit Report

A collection is when your overdue bill is sold from the original creditor (such as a credit card company or doctor’s office) to a collection agency. The debt is usually sold for just pennies on the dollar. However, the creditor would rather bring in a fraction of the bill than spending the time and money it takes to collect it.

removing collections

After buying the debt, the collection agency then reports the account to each of the three credit bureaus and begins to seriously attempt to collect the full owed balance.

If you already have a collection on your credit report, you know this is bad for a couple of different reasons. First, you could be subject to aggressive phone calls and letters from the collection agency. Secondly, your credit score will take a huge drop. Just how much depends on the size of the balance.

Plus, it will remain on your report for seven years from the original default date, even after you’ve settled with the collection agency. However, there are a few instances in which you can have the collection removed entirely from your credit report. We’ll show you four methods that are worth giving a try.

4 Ways to Remove Collections

A collection on your credit report won’t last forever, but it helps if you can expedite getting rid of it. Here are four ways to remove a collection so that you can begin the credit repair process immediately.

1. Identify Errors

According to the Fair Credit Reporting Act, all of the information contained in your credit report must be both accurate and complete. Anything else is legally required to be removed. That means your best shot for success in having a collection deleted is to scour your report for any type of error in the way it’s been documented.

First, make sure that the collection actually belongs to you. With such a large amount of data being constantly analyzed by the three credit bureaus, it’s not completely unheard of to have accounts and collections mixed up.

If the collection does belong to you, check all of the information listed with the account. Look at the default date associated with the account. Make sure it’s the same date it went into default from your original creditor, not the collection agency.

Some less reputable collection agencies try to report the wrong date to give them a longer time frame to collect the debt. Also, review how much time has passed since the original date of default. If more than seven years have passed, the collection should have completely dropped off your report. If it hasn’t, you have the right to request that it be removed.

When any of these red flags appear on your credit report, you must open a dispute with each individual credit bureau. They are required by law to investigate and respond to your complaint within 30 days of receiving your request.

If the accuracy of the debt cannot be verified by the collection agency, then the credit bureaus are required to have it removed from your report.

It may take a few weeks to see the change on your credit report, but once you do, you should also notice a huge jump in your credit score.

2. Pay for Delete

A popular notion surrounding the removal of a collection is that you can pay off the collection to have it deleted from your credit report, also known as “pay for delete.” This is usually done by writing a pay for delete letter to the collection agency.

Typically what happens is that if you consent to pay your owed amount in full, the collection agency may then agree to have the collection removed from your credit report, since they are the ones who originally reported the information.

sending a letter

The downside to this tactic is that you usually need to pay the full amount owed. That means there is little to no room for negotiating a settlement as you can often do with a collection agency. Depending on how much you owe, this may or may not be a practical idea for you.

Also, pay attention to the timing of your collection and your future financial goals. If the collection is six years old and set to drop off next year, you may not want to bother paying the full amount. This is especially true if you don’t foresee having any major financing needs before then.

On the other hand, if you are planning on buying a house and can’t wait until the next year, your chances for approval and your interest rate could potentially benefit from getting that collection removed as quickly as possible.

When you do decide to negotiate for a pay for delete, be sure to get every single detail in writing before you sign anything or send in your payment. You don’t want to fall for a bait and switch where you think you’re going to have the collection removed and then come to find out it was never included in your contract.

3. Strive Towards Healthy Credit

The next best thing to do when you have a collection on your credit report is to avoid adding any other negative items. Even though your collection could stay visible on your report for a full seven years, it won’t actually impact your credit score that entire time. In fact, your credit score naturally begins to repair itself as time goes by.

If a few years have already passed, your score might not even be that hugely affected by the collection. So get started with other healthy financial behaviors to avoid damaging any progress that is currently underway.

That primarily means you should pay all of your bills on time each month. Just a single 30-day late payment can cause a big dip in your score and it will continue to drop for every extra 30 days you are late. Imagine what a few of those a year could do to your credit score!

Avoid hurting your score anymore by being diligent with your bills. Any easy tip to stay on top of your due dates? Sign up for autopay — just be sure to still review the amount due each month to make sure the total is accurate.

Next, work on paying down existing debt, particularly those accounts with high interest rates. We’re not talking about your mortgage or even low-interest student loans. Instead, focus on credit card debt or maybe an expensive car loan.

By lowering your debt amount, particularly with revolving credit like credit and retail cards, you’ll also help out your credit score. Then once the collection comes off, your score will already be in a strong position. All of these actions also lead to long-term financial health because you’re spending and saving in a way that truly works for you. Once that behavior becomes a habit, you’ll be on a positive trajectory throughout your future.

4. Get Help from a Credit Repair Company

When you have several negative items on your credit report, including collections, it might be worth your while to find a reputable credit repair service to help. The best ones employ staff lawyers and paralegals who know credit law inside and out and are professionals when it comes to the art of negotiation.

Not only will you likely see better results by hiring a credit repair company compared to taking on creditors and debt collectors on your own, you’ll also save yourself a significant amount of time and effort. Disputing just a single negative item on your credit report can take hours on the phone over the course of several calls. A credit repair company does the work for you.

Before signing up, most companies offer a free consultation to review your specific situation. If they don’t offer this service, it could be a potential red flag. Together you’ll review the items on your credit report and you’ll receive expert advice on which ones to target for removal.

If you just have one or two items, the company may not recommend hiring them. But if it looks like several negative items are impacting your report and have the potential to be removed, it’s worth scheduling that call.

You can also receive advice on the best way to negotiate with your creditors and what kind of settlements, if any, to agree to. And since you’ll be dealing with seasoned professionals, you don’t have to worry about saying the wrong thing on the phone to your collectors. The stress and squeamishness are taken away by someone who fully understands the law and your rights.