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Three Ways to Remove Debt Collections from your Credit Report
Do you have unpaid or even paid collections on your credit report? Did you know that these debt collections on your credit report are damaging your credit score?
3 Ways of Removing Debt Collections From Your Credit Report
1. File a Credit Report Dispute
We encourage you to first start by disputing credit report collection items with the credit bureaus directly. You are going to have to do this with each of the three major credit bureaus Equifax, TransUnion, and Experian. According to federal law, the Fair Credit Reporting Act, the credit bureaus are required to investigate your credit dispute.
The credit bureau investigates the debt collection by contacting the collection agency and asking for verification of your debt account information. If the collection agency is unable to verify your debt then the credit bureaus must remove the debt collection from your credit report!
It is common for credit bureau investigations to result in the deletion of bad credit items. This is especially true with debt collections because collection agencies. They will only typically hold your account for 6 months.
If they are unable to collect payment from you during those 6 months, then they will sell your account to another collection agency. If the credit bureau contacts this collection agency that has just sold your account to verify a debt on your credit report.
The collection agency will often not verify your account. This is because they have sold your account. And thus there is no financial incentive for the collection agency to verify a credit bureaus investigation!
In other words, the collection agency is not going to spend the money or time to verify your account information. Because they can no longer legally collect payment. The account been sold to another debt collector and the credit bureaus will have to give you a clean credit report.
A dirty little secret of the collection agencies is to ‘re-age’ your debt or view your account as brand-new once they get possession of it. This way they can report negative information to the credit bureaus about you. In hopes of pressuring you to pay.
There are federal laws to protect you and other consumers from this behavior and say that you are only legally responsible to repay a debt collection for seven years from the original date of delinquency. Many consumers report that debt collections follow them for much longer than seven years!
2. Debt Validation
If you are currently be contacted for repayment, you can request that the collection agency validate your debt account first. This is going to require the collection agency to show you legal evidence that your debt is within the seven year time window. And that this specific collection agency owns the legal rights to collect on your debt account.
You can do this by sending a debt validation letter. However there have been collection agencies fined by the Federal Trade Commission (FTC) for ignoring consumer debt validation requests. If you are a victim of this or would prefer a professional to fix your credit we would encourage you to consult with a credit repair attorney.
3. Pay For Deletion Or Negotiate A Settlement Agreement
If you are debt is legit. We encourage you to negotiate a settlement agreement. In your settlement agreement you should make sure that you pay less than the total balance due. In exchange for your payment the collection agency will remove collections on your credit report by contacting all three major credit bureaus.
Removing Collections From Credit Report
Unfortunately, it is a roll of the dice with step two and step three. Many collection agencies completely ignore federal laws and regulations. There are endless reports from the FTC about huge fines even to the big collection agencies like NCO Financial, Allied Interstate, Midland Credit, and more.
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