Home > Managing Debt > Can You Get a Debt Collection Account Off Your Credit Report?

Comments 222 Comments
Advertiser Disclosure

Disclaimer

Sometimes life happens – late payments, overdue bills and credit mishaps can hurt even those with excellent credit scores. Even the smallest issue can cause your credit score to take a hit and leave a debt collection account on your credit report. Waiting to see credit scores bounce back, or late payments and collections from previous years to finally drop from credit reports is a not an easy feat.

Generally, it can take years for credit scores to return to what they once were.

It’s true that the primary way to heal your credit is the passage of time. Most negative credit reporting remains on your credit reports for up to 7.5 years from the date you first missed a payment to a credit card that later went to a debt collection company.

You can wait while avoiding major financial moves, but you may need your credit score to recover more quickly. You may be looking to finance dependable transportation, or hoping to purchase a home. Your credit may be in rough enough shape that you are denied credit, or find the loan you can qualify for is likely to be set at much higher interest rates. Future financing plans aside, you may just want your credit score fixed ASAP.

Waiting is not the only solution. Here are some ways to get collections and late pays off of credit reports sooner.

Dispute a Collection Account

You can dispute an item on your credit reports that you believe to be inaccurate, incomplete or out of date. This only works if there is a legitimate cause to believe an item is not yours, like a collection account tied to an account you have never had, or an address where you never lived.

You can also dispute if you think the balance of a collection account is wrong. Collection balances tend to get inflated. Sometimes collectors can’t prove how they are legitimately owed a larger amount than what you think it should be. Balance disputes can occasionally result in a collection account being removed from your credit.

Disputes can result in corrections to errors found on your credit reports. This can be done by phone, but oftentimes it can be difficult to reach someone beyond a customer service representative who does not have the power to handle disputes. It may be better to send disputes in writing and use a certified mail return receipt. Keep a copy of all communications you send and organize anything you receive. You may need them later.

Pay Off or Settling Collection Accounts

Settling old bills that went to collections can help improve your ability to qualify for loans. If you have unpaid collections on your credit reports, you may need to pay them to qualify for a home loan. Or, maybe you’re more financially stable and want to resolve old debts.

Negotiating a lower payoff with bill collectors is fairly common. The savings you can achieve will vary by person and account. Paying old collection balances in full can be a lengthy process, whereas negotiating lower payoffs allows you to resolve multiple debts more efficiently. Either paying in full or getting a debt collector to agree to accept less results in the same thing – a zero balance owed updated to your credit reports.

Paid collections can briefly drop a credit score, depending on the one you are looking at. FICO scores factor in whether or not collection items are paid, whereas a newer version of VantageScore will not factor in paid collection items. Settling a collection account and any resulting credit score drop could impact pricing and access to other credit products.

Pay for Delete Requests

There are some limited instances where you can contact your creditor, or a service provider you owe, and request that they remove any negative reporting in return for your full payment. The opportunities for this “pay for delete” method to work are limited. My experiences suggest you may have a shot with this strategy on unpaid medical and utility bills, but little else.

Goodwill Letter Requests

You may also write a letter to someone still reporting negative information to the credit bureaus even though you already paid that account. This is generally most effective when you have a history of ontime payments.

Creditors have no obligation to remove these payments. Realize you are asking people to make exceptions to set business policies and internal job training. In your letter, keep a polite tone and avoid blaming the creditor. While keeping it brief, mention your positive payments and the personal hardships or situation that led to a late payment. You’re asking the person reading your letter to exhibit good will by ceasing to report negative information.

Ensure your letter is sent to the address for correspondence, not the address that receives payments. You may also want to use certified mail to ensure your letter arrives. While positive outcomes from goodwill credit removal requests are generally uncommon, they can be worth a shot. You may find success writing to service providers and companies.

Use these strategies carefully. Goodwill requests and pay for delete negotiations can be counterproductive if you’re reaching out to debt collectors. They have contracts with the credit bureaus and won’t risk those relationships based on your goodwill request, or a payment for one account. When you request credit report removal as a condition before you agree to pay, it could lead to a debt collector to hold out for more money in your negotiations in exchange for help cleaning up your credit.

Request An Expedition of the Removal

If you want to shorten how long it will take for the credit to be removed from your report, it might be wise to send an appeal. Send a letter of appeal to the collection agency, again using certified mail, asking to expedite the removal of this credit. This is a good option for those who plan to make a big purchase or request a loan in the near future. In this request, you may want to explain why the debt collection item is there and any steps you are taking to move forward and clear debt.

Keep Track

While this won’t necessarily facilitate or quicken the process of clearing blemishes on your credit history, it won’t hurt and it’ll help you stay informed. When dealing with collection items from your past, it’s important to check your credit reports, and to determine what you need to work on. You can monitor your credit scores for free on Credit.com to track your progress and get a plan in place to improve them.

Finding the patience to wait for credit damage to run its course, and making good choices to rebuild your credit along the way, can be tough, but it’s worth it. Whether you wait it out or take small actions to quicken the process, getting your credit back on track will be worth it.  

More on Managing Debt:

Image: Pixsooz

Paige DiFiore contributed to this article. This article has been updated. This article was originally published July 18, 2014.

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.



Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team