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How To Remove Collections From Your Credit Report
By Aja McClanahan MONEY RESEARCH COLLECTIVE
Negative items like a collections account can harm your credit score. If you’re in the process of buying a home, purchasing a vehicle or using your credit for some other financial goal, having bad credit means your loan terms could include a higher interest rate. And having just a slightly higher interest rate on a loan can add thousands, if not tens of thousands of dollars in interest over the life of your loan. If at all possible, you should do everything you can to remove collection accounts from your credit score.
Though there are no guarantees that the major credit bureaus will remove your collection accounts, many people have reported success with the steps we’ll outline below. Here’s what you need to know about removing a collection account from your credit report.
Can you get collections removed from a credit report?
What is the best way to remove collections from a credit report?
Summary of Miami Herald’s guide for removing collections from your credit report
FAQs about removing collections from your credit report
Can you get collections removed from a credit report?
It’s very possible to remove collections activity from your credit report using a dispute process. As a consumer, you have rights outlined in the Fair Credit Reporting Act (FCRA), which allows you to dispute information on your credit report—either with the creditor or the credit bureaus.
If the information on your credit profile is inaccurate or cannot be verified, you have the right to dispute this information. If the negative information on your credit report can’t be verified, the credit bureaus must remove them from your credit report.
Pros and cons of removing collections from credit report
Although it seems like removing a collections account would automatically improve your credit score, there can be some unintended consequences if the process backfires. Here are the pros and cons of removing a collection account from your credit:
Pros of removing collections from credit report
If your attempt at removing the collection account from your credit report is successful, it could result in an increase in your credit score. If the item is relatively new, compared to your other credit accounts, it could have more of a negative impact than an old debt.
Cons of removing collections from credit report
There’s a small chance that attempting to remove a collection account from your report could harm your credit score. If your dispute is unsuccessful, the credit bureau could actually update the account with new information. Adding updated information may update your record with recent collection activity, which could harm your credit score.
If you have a specific goal for your credit profile, like buying a home or qualifying for some other type of loan, you should ask your lender for guidance regarding your collection accounts. For instance, they may consider different credit scoring models (FICO score vs. VantageScore) and look at different types of debt like student loans and medical collections differently. Typically, they understand exactly what the underwriting guidelines are for their applicants’ credit histories.
What is the best way to remove collections from a credit report?
Step 1: Get a free credit report and identify any collection accounts.
Step 2: Ask the debt collection agency to validate your debt.
Step 3: If the information is inaccurate, dispute it with one or more of the 3 credit bureaus below.
Step 4: Ask for a goodwill deletion (provided the information is correct or you’ve paid the account off).
Step 5: Negotiate a pay-for-delete.
Validating your debt
According to the Fair Debt Collection Practices Act (FDCPA), a debt collection agency must verify the details of your delinquent account within five days of communicating with you about it. If the information they provide doesn’t match your records, you have the right to ask for the debt to be validated.
Many states require that collection agencies be licensed. If you discover that the agency that placed the notice in your credit record isn’t licensed to do business where you live, report the unauthorized collection attempt to the Federal Trade Commission and to your state authorities – and let the credit bureaus know.
Make sure your debt validation request includes the following:
- Information about the original creditor and account
- Amount and age of the debt
- Supporting documentation such as an original invoice, bill, promissory note or similar document to validate the debt
- Documentation that the collection agency doesn’t have the required state license (if applicable)
Disputing your debt
You can dispute a collection account with one or more credit bureaus by phone, online or by mail:
| Online | Mail the dispute form with your dispute letter to: | Phone | |
|---|---|---|---|
| Equifax | Equifax Information Services LLC P.O. Box 740256 Atlanta, GA 30348 | (866) 349-5191 | |
| Experian | Experian P.O. Box 4500 Allen, TX 75013 | (888) 397-3742 | |
| TransUnion | TransUnion LLC Consumer Dispute Center P.O. Box 2000 Chester, PA 19016 | (800) 916-8800 |
When disputing a collections account with the credit bureaus, you should be very specific about why you believe the information is inaccurate. If you’ve been a victim of identity theft or see incorrect amounts and dates, you’ll need to be specific about that in your dispute. Also, if you have documentation that supports your dispute claim, like an original bill, it can help your case.
Once you have submitted a dispute about the account in question, the credit bureaus have 30 days to respond to a credit report dispute. If you don’t get the desired results, such as the account being removed or updated with correct information, you can repeat the process with a different dispute reason.
If the information about the collections account cannot be validated, usually within 30 days, the credit bureaus must remove it from your credit report. Otherwise, they may simply update the account with the correct information.
Goodwill deletion
A goodwill deletion involves asking the collector to remove the item from your credit report as a courtesy. There’s no guarantee that they will do this because they are not legally obligated to do so.
This approach works best when it’s a paid collection as opposed to an unpaid collection, and the account’s payment history is in good standing. If the collection agency grants your request, the missed payments won’t disappear from your credit history, but at least the actual collection account will be removed.
Pay-for-delete
Another approach is negotiating a pay-for-delete. You can ask the creditor to delete the account from your credit as long as you pay all or a portion of the balance. Even if the debt collector agrees to this arrangement, the late payments will remain on your credit, though many debt collection agencies are phasing out this practice.
Summary of Miami Herald’s guide for removing collections from your credit report
Removing collection accounts from your credit report isn’t impossible, but there’s definitely no guarantee that going through all of the steps above will result in the account being removed. However, millions of consumers have reported success with this process, so it’s worth a shot — especially if it could result in a better credit score. If, however, you do not have the time, an option could be to employ a credit repair company to work on your behalf.
FAQs about removing collections from your credit report
How do I remove collections from my credit report ASAP?
Will deleting collections improve credit score?
How do you remove a collection without paying for it?
Aja McClanahan is a writer that covers personal finance and a number of related topics. Her work and personal story of paying down over $120,000 in debt have been featured in publications around the web including sites like Money, CreditCards.com, Business Insider, Inc., Experian and many others.