How to Remove Collections From Your Credit Report

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Do you have questions about how to remove collections from your credit report? Our bankruptcy lawyer at Chang and Diamond, APC, can help you. Call us.

How to Remove Collections from Your Credit Report and Boost Your Score

Are you part of the 28% of Americans with collection accounts on their credit report? Would you like to improve your credit score and qualify for better loans and interest rates?

Removing collections means removing negative information that shows you haven’t paid a debt in full or on time. Collections can stay on your credit report for up to seven years, even after paying them off. They also affect your credit score. The degree depends on the severity and recency of the delinquency.

Fortunately, you have different options for removing collections from your credit report. You can dispute them, negotiate with the collectors, or wait for them to fall off. However, these alternatives can be challenging. You need professional help from a qualified attorney to handle your case.

Reach out to us at Chang & Diamond, APC, for help. Our San Diego debt collection attorneys can help you with credit report issues. We have experience in consumer protection.

Understanding Removal of Collections from Your Credit Report

Removing collections from individuals’ credit reports eliminates or reduces the negative impact of accounts sent to collections by your original creditors. They are debts you have failed to pay on time or in full. They have been sold or assigned to a third-party debt collection agency or buyer. Collections hurt your credit score. You’ll have a harder time getting approved for loans, credit cards, and mortgages.

How Long Do Collections Stay on Your Credit Report

Collections could stay on your credit history for seven years from your original delinquency date. This is according to the Fair Credit Reporting Act (FCRA). That means that even if you pay off the collection, it will remain on your report till the seven-year mark. So you need to get the paid collection removed by disputing it or negotiating with the collector. However, the older the collection is, the less it will affect your credit score. Newer credit scoring models, like FICO 9 and VantageScore 4.0, ignore paid collections.

 

How Can You Dispute Collections on Your Credit Report?

You can dispute collections on your credit report if they are:

  • Inaccurate
  • Incomplete
  • Fraudulent

This helps remove them from your credit reports and improve your credit score.

Here are some steps you need to take to dispute collections on your credit report:

  • Request a copy of your credit report. Reach out to each of the three credit bureaus; Equifax, Experian, and TransUnion. You can get one free credit report per year from each bureau.
  • Review the credit report. Identify collections that are incorrect or outdated. Look for errors like wrong account numbers, inaccurate information, or statuses. Also, check if the collection account has passed the seven-year mark.
  • Gather evidence. Put together documents or records that can prove your dispute. You need payment history, account statements, and correspondence with the creditor or collector. Make copies of these documents and keep the originals for your reference.
  • Write a dispute letter. Send it to the three major credit bureaus or file the disputes at each credit bureau’s website. Explain why you are disputing the collection and what you want them to do. You could ask them to delete, update, or verify the information. Include your name, address, phone number, account number, and a copy of your credit report. Attach copies of your supporting documents.
  • Send your dispute form. Send it by certified mail with the return receipt requested to each credit bureau. The addresses of the credit reporting agencies are:
    • Equifax P.O. Box 740256 Atlanta, GA 30374-0256
    • Experian P.O. Box 4500 Allen, TX 75013
    • TransUnion P.O. Box 2000 Chester, PA 19016-2000
  • Wait for a response. It takes 30 days to investigate your dispute and notify you of the results. They may remove it from your credit report and send you a confirmation letter. If the collection is accurate, they will keep it on your report and send you an explanation letter.

Are you unsatisfied with the outcome of the dispute? You may escalate your case to the Consumer Financial Protection Bureau (CFPB). You can also file a lawsuit against the credit bureau or collection agencies.

 

How Can You Negotiate With Collectors To Remove Collections From Your Credit Report?

You can negotiate with collectors to remove unpaid collection accounts from your credit record. You can offer them a lump sum or a monthly payment plan. In exchange, they delete the negative information from your report. This is called a pay-for-delete arrangement. It can help you improve your credit score.

Here’s how to negotiate with the collections agency to remove collection accounts:

  • Know your rights. Ensure you know your rights under the Fair Debt Collection Practices Act (FDCPA).
  • Verify the debt. Ensure the unpaid debt is yours and it’s valid.
  • Negotiate the terms. Negotiate with the debt collector to have the collections removed. You could ask them to reduce the amount from your credit report. Make sure that you get everything in writing before you make any payments.
  • Make the payment. Make the payment according to the terms. You can use a money order, a cashier’s check, or a prepaid debit card to avoid giving them access to your bank account. Keep records of your payments and receipts.

Options for Removing Collections From Your Credit Report

There are four options to remove collections from your credit report:

  • Request a goodwill deletion. Ask the collection agency to remove the collection account upon paying off.

  • Dispute the collection account. The online dispute forms on the credit bureaus’ websites make disputing delinquent accounts easy.

  • Negotiate a pay-for-delete agreement. Negotiate with the original creditor to delete it in exchange for a partial or full payment.

  • Hire a professional credit repair company. If you feel overwhelmed by the process, hire a professional credit repair company.

Would you like to remove collections from your credit report? At Chang & Diamond, APC. We have the experience to help you dispute, negotiate, or defend your case.

What Documents Do You Need When Disputing a Collection on Your Credit Report?

You need specific documents on your credit report when disputing a collection. The credit reporting agency needs to check the details, and you are supposed to provide all necessary documents.

  1. Debt Validation Letter: You can get this from the debt collectors. It should contain details of the debt, including the amount and the creditor.
  2. Financial Records: Any records showing payments or settlements of the debt in question. This could be bank statements or receipt of payments.
  3. Correspondence Records: Copies of any communication between you and the creditor or collection agency.
  4. Credit Report Copies: Highlight the inaccurate collection of information you are disputing.
  5. Backup Documentation: You need to provide the other documentation that validates your claim, such as identity theft reports if applicable.

With these documents, you can ensure that the credit bureaus find substantial evidence to consider removing the inaccurate collection information from your report.

How Do Different Types of Collections Impact Your Credit Report Differently?

Collections can significantly impact credit scores, but the effect varies depending on the type of collection and account status.

  1. Paid Collection Accounts: These accounts show that you have settled your debts, which can be viewed more favorably than unpaid collections. However, they still indicate a history of missed payments.
  2. Medical Collections: Often treated differently by credit scoring models because they result from events often beyond one’s control. Recent credit scoring models weigh medical collections less heavily than other types of collections.
  3. Credit Card and Loan Collections: These typically have a more significant negative impact. They are directly related to personal finance management, reflecting on your ability to manage credit responsibilities like auto loans and credit cards.
  4. Frequency and Recency: Multiple collections typically harm more than a single instance. Recent collections are more damaging than older ones, which impact loved time with good credit habits, like on-time payments and reduced overall debt.

Though all collections can have adverse effects, the extent varies based on the type of debt, whether it’s paid, and the original account’s nature.

It is crucial to maintain one’s own records and make efforts to rectify any collection activity via methods like a goodwill letter to remove negative marks.

How Chang & Diamond, APC Can Help You With Removing Collections From Your Credit Report

Here’s how an attorney at Chang & Diamond, APC, can help you:

  • Evaluate your credit reports and identify any errors in the collection accounts.
  • Negotiate with creditors or collection agencies.
  • Defend you against legal action the collection agencies may take against you.
  • Filing for bankruptcy under Chapter 7

Do you have questions about removing collections from your credit report? Talk to an attorney at Chang & Diamond, APC. We provide resources and legal aid for issues like creditor harassment, bad credit, or late payment.

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