How to Remove Collections from Your Credit Report
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When I was preparing to get pre-approved for a mortgage, I knew that I needed to ensure that my credit history and credit score were in good standing. Especially since mortgage lenders check all three credit bureaus (Equifax, TransUnion, and Experian) rather than just trusting one of these scoring models, any could have affected my ability to buy property.
Thankfully, I didn’t have any negative items like late payments in my credit report, but you might be facing similar issues hurting your score. One major factor in many people’s bad credit ratings is missed payments on things like medical bills, student loans, or credit cards. If you’re looking to get a bill that went to a collection agency or debt collector off your credit report, here is what to do.
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What does it mean if you have a bill go to collections?
If you haven’t been making payments on a debt for some time, lenders may decide to sell your original account to a debt collection agency. Debt collectors take delinquent accounts and try and get you to pay on them, using various methods like calling you on the phone or sending you collection notices. Even though the original creditor isn’t asking you for money on your past due bills, you still owe that money if it hasn’t been paid.
Having a collection account listed on your credit report can certainly lower your overall score. It also makes you less attractive to lenders if you need to open a new account. Any collections on your have the potential to stay there for up to seven years. This is why it’s important to pay off collections as soon as possible.
Although newer formulas for the don’t count paid collections against you, not every lender uses the updated formulas. As such, unpaid collections and paid collections may count against your payment history the same if you don’t take action to fight inaccuracies.
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How to remove collections from your credit report
Pull your credit report
The first step to removing collections from your credit report involves pulling your credit report to get the most up-to-date information about your credit. While services will take your money to do this, you don’t need to spend a dime to access your credit report. Thanks to the Fair Credit Reporting Act and Consumer Financial Protection Bureau, you’re allowed to access a free credit report annually.
How should you go about accessing your credit report for free? While it might look a bit outdated, annualcreditreport.com is one of the simplest ways to quickly pull each credit bureau’s report on you — completely free of charge. You’ll just need to input some personal information and answer a few security questions before you can download your reports from TransUnion, Experian, and Equifax.
Once you’ve pulled your credit report, you’ll want to look and see if any collections accounts are showing on it. If so, you need to cross-reference those amounts and collectors against your own records. Take note of when collection accounts were opened, and whether or not they’re listed as closed, paid, or charged-off. It’s also a good idea to make sure every other aspect of your credit report has accurate information, too. Make sure that your name, address, and all other debts are properly accounted for on your report.
Dispute any errors
If anything seems , you’ll need to send a dispute letter to the collection agency! Two of the most common types of errors you might run into when it comes to collections are incorrect collections and errors that have passed the seven-year threshold to stay on your report.
If the problem you find on your credit report is a collection error, you’ll need to dispute it with the debt collection agency and ask them to verify your debt. Note that there is a slight statute of limitations on debt verification. You have up to 30 days from receipt of your first collection notice to dispute any delinquent accounts, so make sure you do so in this timeframe.
If the inaccuracy on your credit report is an account that’s considered too old to be appearing on your report, you’ll need to dispute this fact with each of the three credit bureaus. TransUnion, Experian, and Equifax all have an online portal to do this through, and they have 30 days to respond to your request.
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Goodwill deletions
While not always a surefire solution, asking for a goodwill deletion could work in your favor if you have a history of on-time payments since paying off the account that went into collections. Of course, you have to have already paid the account in full, but if you really want to remove a collection from your report, it doesn’t hurt to ask.
It’s important to note that a goodwill deletion, if successful, won’t remove any of the late payments that contributed to an account going into collections from your report. It will, however, reduce some of the stings by eliminating the collection account, which can boost your credit score.
Goodwill deletions usually require a deletion letter sent to the debt collection agency or the original creditor. In your letter, it can sometimes be helpful to explain why you’re asking for it to be removed before the seven-year timeframe is up. For example, if you were applying for a mortgage and wanted to get better interest rates by having a higher credit score, that is something you’d want to reference in your letter.
Weigh the pros and cons of paying for deletions
In some cases, you may be able to negotiate with a collection agency and pay for deletion. This can be difficult to do and raises some ethical eyebrows; however, it is an option you may want to consider.
Rather than settling with the collection agency — for example, by agreeing to pay a lower amount than is owed for them to close the account and consider it paid — paying to delete allows you to pay off the collection account in exchange for it being removed from your credit report. If that reads like bribery of sorts, you’re not entirely wrong. This practice lives in a bit of a grey area from an ethical standpoint. As such, not all collection agencies will perform a pay-for deletion.
Some credit repair companies will offer this service... for a hefty price.
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The cost of removing collections from your credit report
Unless you have an incredibly complicated case that requires an attorney or legal counsel, it’s unlikely that you need to spend any money to remove collections from your credit report. Using annualcreditreport.com, you can access your credit report in under 20 minutes for free. Additionally, if you submit your dispute letter online, you don’t need to pay for postage or an envelope.
Pros and cons
Pros
- Boosts your credit score. One of the biggest reasons to remove collections from your credit report is to improve your credit score. If you’re applying for a major loan or mortgage, every step you can take to boost your credit is a step worth taking.
- Speeds up credit repair. While collections should automatically be removed from your credit report in seven years, seven years is a long time to wait! Removing collections from your report is a great strategy if you’re interested in speeding up the credit repair process.
- Offers peace of mind. Having a bill sent to collections is often associated with a rough financial patch in your life. If seeing a collection on your credit report just brings up bad memories related to a past version of yourself, removing collections can offer some peace of mind as you move forward.
Cons
- Not always successful. Unless the collection account on your credit report is in error, you may not always be able to find success removing a delinquent account before it is slated to “fall off” of your report in seven years.
- Some methodologies are dubious. As outlined above, pay-to-delete approaches to removing collections from your credit report life are a bit of an ethical dilemma. As a result, not all agencies are even willing to consider this strategy, even if you are comfortable taking this tactic.
- Takes time. While the process to remove collections from your report is relatively straightforward, it’s not instantaneous. Beyond the research, you’ll need to perform and documentation you may need to provide, collection agencies can take up to 30 days to respond to your requests.
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The bottom line
If you’re looking to improve your credit score and have collections accounts paid in full that appear on your credit report, it doesn’t hurt to try and remove them. Of course, if the account appears in error, you should definitely report the inaccuracy, but when it comes to goodwill deletions, even they are worth your time.
It takes some effort, and it’s not always successful, but if you are one of the consumers who does find success, removing a bill that went to collections can offer peace of mind and more financial stability. Follow the steps above, and you may just boost your score through your hard work!
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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