How to Get a Collection Removed From Your Credit Report
Good credit is essential in obtaining personal loans, mortgages and car loans. Our credit reports are the determining factor of whether we will gain a creditor's trust. Collections can destroy present and future credit relationships. The Fair Credit Debt Practices Act provides regulations on how collection agencies can behave. Knowing what a collection agency can do will have help you in your attempt to remove collections. Removing collections will better your credit score and increase your credit approval with low interest rates. Start repairing your credit by removing collections from your credit file.
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Instructions
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Get credit reports from Equifax, Transunion and Experian (follow the link in the Resources section below for addresses) and write down the date the item went past due without any interruption of payment and the balance. Use the most recent date of delinquency without any payments received to start the seven-year statute for items being deleted from your credit reports.
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Dispute the collection account by sending a certified signature requested letter to the collection agency's physical address, return receipt. Request that the agency verify the debt within 30 days in compliance with Fair Debt Collection Practices Act, 15 USC1692g Sec. They have to show you that they own the debt and you are the debtor to the original creditor. Verify the address on the credit as the collection agency's physical address.
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Dispute the account with the credit bureaus. State why the account should be deleted and provide any evidence supporting the claim, such as pay stubs of payment before collection activity. Demand all accounts pass the seven year limitations be removed. The Fair Report Act states that all disputed credit report information be disputed, corrected, or deleted. All collection but bankruptcies pass the sever year statute must be deleted pursuant to the Fair Credit Report Act.
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Pay the collection only if it is validated. Negotiate a settlement amount starting at 25 percent, since most debt is bought for pennies on the dollar. The negotiated amount must include a promise of deletion once payment is received on the agency's letterhead with a time limit. Also have it stated in writing that there will be no further collection attempts and they will not resell the debt.
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Settle the account with a "paid in full" on the receipt. You do not want the debt listed as "settled."
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Check your credit reports after the time frame agreed on for the deletion. If it the account is still listed, send all documents stating the account is paid in full and was to be deleted. Send a courtesy reminder to the collection of the agreement.
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Tips & Warnings
Keep all copies of correspondence.
Don't be discouraged if your settlement offer is denied. You have reassured them of payment and collection agency will most likely contact of you with acceptance of your offer.
The longer the item is in collection the better your chances of having the item deleted.
You are entitled to $1,000 in damages for each violation if the collection agency violates any of the Fair Debt Collection Practices Act.
Do not make any payment on a verbal agreement. Always have the agreement in writing.
