Like thousands of other people who are pulling their credit report today, you might be surprised to find a collection account on your credit report. For many, these collection accounts are inaccurate but there are steps that you can take to clean up your credit report.
Removing collection accounts is quite common and it’s a matter of knowing your rights to correct the information that is being reported.
For starters, collection accounts appear in your credit report when a creditor has unsuccessfully collected a bill. The process occurs like this – you miss payments on a bill, your account goes delinquent, the creditor attempts to contact you, you are unable to pay or uncommunicative and so the creditor will eventually sell the credit balance to a collections agency. The collection agency reports the collection account to the credit bureau. The collection now appears in your credit report.
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Not only will you have the negative delinquencies in your credit report, you will also have a collection account for the charged off balance reported by a collection agency. Your credit score is impacted by your reported delinquencies and the reported collection account.
What happens when the bill was paid but sent to collection and reported inaccurately? What can you do if you plan on paying off the collection amount and want the collection note removed?
There are no assurances that a collection account will be removed from your credit report even after you’ve paid the collection amount. But, here are some ways to increase the likelihood.
5 Steps to Remove Collection Accounts from your Credit Report
1. Pull your credit report. Go to AnnualCreditReport.com and print out your credit report. Use a highlighter to mark the collections and delinquencies. This helps you visualize where to focus your efforts. It’ll give you an idea of the company or agency you need to contact. The contact information including the phone number will be noted alongside the collection account.
2. Call the collection agency. Find the number of the agency and reach out to them immediately. Find out the details of the collection to determine if this was an account that was paid, reported inaccurately or an amount due that needs to be paid.
If you find out the collection is inaccurate, back your claim with documents that showed the accounts were satisfied. If this is money you indeed owe, request a settlement with a “pay for delete.” The “pay for delete” is considered a delete clause to pay off the amount due and upon payment the collection record is deleted.
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Note that creditors and collection agencies are not required to report information to credit bureaus. But, if they do report information they are required to report accurate information.
3. Get the agreement in writing. Ask for an verbal, written or emailed agreement. Additionally, make sure you take notes of the person you’ve spoken to, the dates, times and brief synopsis of the conversation. Comply with the agreement.
4. Review the same credit report. Dispute the reported collection account with the credit bureau. They will respond within 30 days of their findings. Typically, the collection account will be removed if you’ve satisfied the agreement with the collection agency.
If the collection account remains and is now reporting a $0 balance, dispute again with the credit bureau and at the same time contact the collection agency. Refer back to your notes and the “delete clause.” Take down notes of the agent’s name, the date, time and detail the conversation.
5. Dispute the information with the credit bureau. If you are unsuccessful in having your paid off or inaccurate collection account removed, continue to dispute with the credit bureaus. Do so by emailing and sending a certified letter via USPS courier.
Call back the collection agency referencing the previous conversations you’ve had with their agents. They may tell you that they do not delete collection accounts.
Don’t get frustrated. Go directly to the credit bureau and share the terms of your agreement and send supporting documents. Persistence can pay off. Remember credit bureaus are not your enemy. They follow the laws that govern their operation. The more you know the better control you have over your credit report.
Learn More About Credit Reports and Scores
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