If you have collections on your credit report, you may think the only way out of them is to pay them. Luckily, that’s not the case. You have other methods you can use to eliminate the collections from your credit report.
Each step takes due diligence on your part, so be prepared to do the legwork and the follow up to make sure you get it done right.
Disputing Collections With the Collection Company
You have the right to dispute collections that don’t belong to you. Even if they do belong to you, but you don’t feel it’s valid collection, you have the right to dispute it. Here’s the catch, though. It’s best if you do this within 30 days. If you dispute the collection after 30 days, you have fewer rights than you would if you contested them right away.
If you dispute a collection within 30 days, you are actually requesting debt validation. This means the collector must be able to prove to you that you do owe the money. If they don’t validate your debt by providing proper documentation or they ignore the request, the credit bureaus must remove the collection from your credit report.
Disputing the Collections With the Credit Bureaus
If you wait more than 30 days, you candispute the collection with the credit bureau. They too will have to validate the debt in order for it to stay on your credit report. If the creditor doesn’t respond to the credit bureau’srequest within 30 days, they must remove the collection.
Disputing Collections After the Statute of Limitations Expires
Collections have a statute of limitations. Right now, that statute of limitations is seven years. After seven years, the collection agency isn’t able to come after you for the money. But it may still remain on your credit report. This is where your legwork comes into play.
It’s up to you to check your credit report at least once a year and see if the collections still exist. If they do, you can write to the credit bureau and request that the collection be removed based on the statute of limitations. If you don’t follow up with the credit bureaus, though, it may stay on your report without you even realizing it.
Request a Goodwill Deletion
Some creditors may remove the collection from your credit report once you’ve paid it in full, if you ask. It’s called a ‘goodwill deletion.’ If you’ve made good on the debt and paid it in full or as agreed, a creditor may be willing to delete the collection from your credit report.
They won’t do it for any old reason, though. You have to give them ample reason to do so. For example, if you paid your debt late because you fell on hard times after being in the hospital, you can explain that to the creditor. They may be willing to delete the collection because of your good history with them and their understanding that you fell on hard times.
If, on the other hand, you have a habit of paying your bills late and you just never got around to paying a bill that went to collections, they may not be as willing. They typically only do this for those that are generally good customers but had circumstances beyond their control occur.
Paying for the Debt
If all else fails, you may have to pay the debt to get it off your credit report. Before you do, though, make sure you talk it over with the lender. In fact, you’ll want the agreement in writing. The letter should state the amount that you and the creditor agree for you to pay in exchange for deletion of the information from your credit report.
Don’t make the mistake of agreeing to do this without having it in writing. Any collector can promise you the world over the phone, but unless it’s in writing, there’s nothing holding them to the agreement. This means you could pay the debt and still have the collection on your credit report.
A pay for delete should be your last ditch effort to get the collection off your credit report.