Your credit report plays a crucial role in most of the financial decisions you make throughout your life. It’s your ticket to getting approved for new lines of credit, loans, and mortgages. If your credit report is filled with derogatory marks, you might even have trouble getting a debt consolidation loan.
So, you probably want to keep your report free of blemishes to keep your credit score intact. And one of the most damaging factors to your score is debt that has gone into collections.
Understand why debt collections appear on your credit report
A debt is sent to a third-party collection’s agency after about six months of delinquency. After being sent to collections, it can stay on your report for up to seven years and weigh down your score, even if you’ve paid.
It’s important to note that collections can also appear on your report erroneously. Such errors will negatively impact your credit in the same way that a legitimate debt in collections would. In these cases, you want to move swiftly to get those errors removed from your report and start repairing your score.
Let’s examine some of the steps you can take to remove collections from your report and boost your credit score.
Gather information and confirm the claim’s accuracy
Upon learning that one of your debts has gone into collections, you’ll want to compile as much information about it as possible. Check which of the three significant credit agencies ‒ Experian, TransUnion, or Equifax ‒ the obligation is being accounted for to. Assortment offices will not really report it to each of the three, yet it’s smarter to be protected than sorry. Observe the record number, balance, credit breaking point, and dates related with the obligation to guarantee that they are precise.
Dispute inaccurate claims
After compiling the specifics, you’ll want to request a debt validation letter. You have 30 days from when the collection agency first contacts you to do so. Failure on the collector’s part to provide either proof or a response in 30 to 45 days means that the debt must be removed from your report.
If you find that the claim is inaccurate after doing your due diligence, you can dispute it. Determine whether the erroneous claim is being filed by the original creditor or a collections agency. Draft a letter to the appropriate institution disputing the inaccuracy. Using the information, you gathered in step one, include the specific item you’re disputing, why you’re disputing it, and a request for its removal. Use certified mail to ensure you have a record of when the bureau received your letter. If they can’t verify the claim’s legitimacy in 30 to 45 days, it should be removed from your credit report.
Remove settled claims from your credit report
Collections will still appear on your credit report even after they’ve been paid. While a paid collection is still much better than an unpaid one, it still might not be a good look for lenders. Fortunately, there are a few ways to have settled collections removed from your report.
The first option will only cost you a sheet of paper and some printer ink: a goodwill deletion letter. Draft a letter to your creditor or collections agency requesting that they remove a settled debt from your credit report. Their compliance isn’t guaranteed, but it’s certainly worth trying.
If asking nicely doesn’t work, you can write a pay for deletion letter. While this method is also not guaranteed, there’s nothing quite like financial compensation to grease the wheels. The agency may be willing to remove a settled debt from your report in exchange for a fee. Sounds scammy, but what’s a clean credit report worth to you?
By John DeGregorio
John DeGregorio is an account essayist situated in Brooklyn, NY. He contemplated Journalism and Media at Rutgers University.