If you have collection accounts on your credit reports, there’s no doubt you just want them to go away. Find out more about how long these items stay on your report, and discover some tips on how to remove collections from your credit report.
Removing Paid Collections from Credit Reports Isn’t Always Easy
Yes, there are tips for getting some items removed. But federal law allows items to be reported for seven and a half years from the date you first fell behind with the original creditor.
That seven-and-a-half-year timeframe probably feels like forever. The idea that you can get the collection agency to remove the account if you pay what you owe could be appealing, but it’s trickier than you may think. Follow this guide for better chances of getting negative items removed.
Do Your Research
The first step to dealing with this situation is to get copies of all of your credit reports. This lets you understand what’s being reported by the three major credit bureaus and how it affects your scores.
You can get a free credit report every year from each of the major credit reporting agencies. You can also sign up for a free credit report card at Credit.com. This report card helps you understand which of the five major credit score factors could be hindering your rise to excellent credit. That helps you know if you can be working on other factors while you’re working to get paid collections removed from your report.
Can I Have a Paid Collection Removed From my Credit Report?
Once you identify that an account in collections is dragging down your score, you might consider steps to get it removed. Consumers sometimes ask collection agencies to remove collection accounts in exchange for payment. Sometimes collection agencies even make this kind of offer.
Collection agencies often respond to this request by stating they are unable to remove the negative information. To a larger extent, that’s true. The credit reporting agencies sometimes prohibit this activity. Otherwise, collection accounts would be removed all the time, and credit reports would not accurately reflect the consumer’s creditworthiness.
However, some lenders can remove items or at least report them in a less negatively. If you negotiate this type of deal, ensure you have the agreement in writing so you have proof of what the collector agreed to do for you.
Asking for a Goodwill Deletions
If you have a great credit history, barring an isolated error or short series of late payments, you might consider writing a goodwill letter to the original creditor. Having paid the debt and being able to prove you’re not a risky borrower looks good to a creditor, and they might remove the negative items from your credit report out of goodwill.
Asking for a goodwill deletion or adjustment to your credit file may resonate better with creditors. Removing negative items from your reports because you paid may be against the rules, but a goodwill deletion might not be.
This strategy has more success than you might imagine, so if your credit history is promising, consider this option. Look online for successful goodwill letters to use as templates to expedite the process even further.
How Many Points Will My Credit Score Increase if a Collection Is Deleted?
If you manage to get a collection account removed, your score could go up substantially. Late payments and collections account for 35% of your score, so collection accounts could be dragging your score down 100 or more points, depending on what else is on your report.
Unfortunately, simply paying a collection account without getting it removed may not improve your credit score significantly or at all. With few exceptions, as long as a collection account is listed on your credit report, it’ll hurt your credit score.
While it’s discouraging to know that paying collection accounts won’t automatically help your credit score, keep in mind that as this information gets older, it’ll have less of an impact. That’s particularly true if you’re building new positive credit references.
How Long Does It Take for a Paid Collection to Come Off Your Credit Report?
Collection accounts remain on your credit report for up to seven years after the date you first became delinquent with the lender. The same is true of all late payments. However, not all late payments are equal.
A payment that is 30 or 60 days late won’t affect your credit score as much as a payment that’s 90 days past due. And a report that you ran a few months past due at one time impacts your credit less than a collections account. So, if you run late and can catch up payments to avoid collections, it can be a good idea to do so.
Disputing Inaccurate Information and Collections on Your Report
A debt collection agency can’t report information that’s inaccurate or incomplete on your credit file. It’s against the law. So, if you find a collection account on your credit report because you had a legitimate dispute with an original creditor or service provider, it’s perfectly reasonable to request that the collection account be removed if you pay the bill. Those types of creditors can and should honor your request.
Also, if any of the information reported about a collection account is inaccurate or incomplete, you have the right to dispute that account with the agencies. They must verify the information with the source. If the source doesn’t confirm the information within 30 days, the credit reporting agency must remove it.
If the collection or debt on your credit report isn’t yours, don’t pay it. Have the credit bureau remove it from your account after you formally dispute it. If a collector keeps a debt on your credit report past the seven and a half years, you can dispute the debt and have it removed. This is especially true if you have proof of the start of the delinquency.
Even when the information is inaccurate, getting creditors to remove items from your report can be difficult. Work with a credit repair agency to have experienced professionals help you handle the entire process.