How Do I Get Collections Off My Credit Report?
Credit collections pose the biggest nuisance to anyone with a credit report. Collection occurs when one has not been able to make payment for an amount owed and it is transferred to a collection company. As much as credit collections are bad for your credit report, the longer they remain in your report, the worse they are for your credit score. However, it is feasible to have some of the collections taken off your credit report if you follow the correct measures. Here are the facts you should be aware of.
Fico – which stands for Fair Isaac Corporation – is the company that created the credit scoring system for the United States, and is still responsible for updating it. The first one is the collection accounts listed on your credit reports, and the aim is to collect all the details about each of them. You can obtain copies of your credit reports from Equifax, Experian, and TransUnion, three major credit bureaus. It is necessary to carefully identify and write down the original creditors and their account numbers, the dates the accounts were opened, and the outstanding balances in the collections accounts listed. This information will come in handy when you are to begin bargain for removal.
Review Statute of Limitations Every state has laws that prevent creditors from suing you for an old debt, and these laws place a certain amount of time within which creditors can sue to recover the money. It is usually between three to six years but this can be a bit longer depending on the states. This is a good chance to check out the statute of limitations for collections on the credit reports in your state to see if the listings fall within or beyond the limits. The accounts that are older than statutes of limitations are not a problem when it comes to their removal.
Validate the Debt The law also states that a collector may not communicate with you if you file for bankruptcy and have not agreed to pay debts through a written repayment plan. This simply means any collector has to substantiate any information on a collections account if required. When you find yourself suffering from collections accounts on your credit report, it is advisable to immediately contact the credit reference agencies to challenge the authenticity of those accounts besides making the debt collector substantiate that the account belongs to you. It is common to find many collections that are pulled out from collectors if they fail to validate the collections.
Negotiate Directly With Creditors If you have accounts that are collected and are legally rightful to you, then it’s wise to pay the original creditors before the accounts are referred to the collectors. Just state your case and tell the creditor that you cannot afford to pay the amount in full at the moment, but suggest a more reasonable payment plan. Many creditors would be receptive to removing the negative status in full or in part if you can make payments of even a percentage of the balance due. Never pay for a negotiation deal without putting the agreements in written and signed forms.
Negotiate With Debt Collectors If the account has not yet been sent to the collection agency, it is advisable to contact the company or agency that is attempting to collect on the unpaid account. People who purchase debts do so at a fraction of the original amount, so even when it is impossible to pay small amounts, settlements can be made. Inform them that you would like to make the necessary payment to clear the debt but the payment plan you have in mind is to make small and frequent payments. Be insistent and try to get a promise of deletion in writing before sending the payment. That is why if you make any payment towards this debt it resets the statute of limitations on that particular debt.
Dispute Invalid Collections If you have some collections accounts listed on your reports, that have never been owed by you or are incorrect, dispute those with the bureaus. The accounts should be supported by a written letter in which the employee submits some facts as to why he or she thinks those accounts are wrong. This applies to the accounts you never opened, the accounts that are opened in your name by someone else due to identity theft, or the accounts that have a wrong balance of money to be paid. Ensure that you present as much evidence and supporting documents as you can.
Retain an Attorney If you have collections accounts due to identity theft or fraud, there are chances that you may need to engage the services of a consumer lawyer or an attorney who specializes in credit repair services. It will mean that they will be the ones to engage the credit bureaus on your behalf in an attempt to dispute wrong information. They also assist in preparing formal complaints and letters and demand that the collectors provide proof of the debts as well as request for the removal of the fraudulent accounts. While most credit repair clinics do charge fees you may consider the cost of getting your reports cleaned worthy.
Building a better credit score is a time-consuming and laborious task but in the case of unpaid collection accounts, they can be deleted by using the above-mentioned techniques. So, just keep yourself well-organized and keep on going until such negative items are eliminated for credit score improvement.
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