How To Get Rid Of Collections On Credit Report?

Introduction

Undoubtedly, it is rather irritating to have collections reflected in your credit report. This occurs when one has not paid a certain bill and the initial holder of the bill has let go of the responsibility of collecting the money from you. Instead, they sell the debt to a collection agency, which will then attempt to extract the funds. This has a bad effect on the credit score and puts one in a compromising position when trying to arrange for a loan or credit card.

The good news is that the following steps can be taken to have the collections expunged from the report. Yes, it can take some effort, but if done right then you have to go through the correct channels of dispute. In this article, you are going to understand what collections are, how they influence your credit, and how you can get rid of them.

What Are Collections

Collections of accounts concern debts that have been placed with a third party such as collection agencies. These agencies are in the business of recollecting ‘overdue dues. ’ Delinquent collections still reflect on your credit report for the next seven years from the time the original account was reported as delinquent.

Having collections also hurts credit scores and reduces your score significantly. Collections on consumers are seen by creditors and lenders as risky hence the general public with unpaid collections is seen to be risky. Collections follow one for a long time and take a toll on credit, especially when it comes to applying for credit cards, loans, mortgages, apartments, utility connections, cell phone connections, etc.

Why Remove Collections

Negatively, deleting some collections might help increase your credit score and enable you to access credit and pay relatively lower interest rates. It is possible to have multiple collections and still have a score below 100. To remove collection it is imperative to challenge the information as being incorrect on the credit reports.

How to Remove Collections

Here are the most effective steps to remove collections from your credit report:

1. Obtain copies of your credit reports and check the collection information to ensure they are accurate and current. Accounts older than 7 years mustn't be present on your credit report.
2. Call the collection agency in an attempt to clear the outstanding balance that they are demanding, negotiate a payment plan, or request the original creditor to buy back the receivable. However, it should be noted that paying collections does not have the effect of causing the item to be deleted from the credit bureau report; on the other hand, making regular and timely payments to your credit accounts will impact positively your credit score in the long run. You may end up making payments to the agency and they agree to delete it from your credit report as a form of compromise. This happens when the first credit grantor wants the account back from the collection agency and the agency erases the account reporting.
3. If paying or settling cannot be deleted, then the consumer should challenge the collection with the credit reporting agency. To do this, one has to write to them through certified mail giving your full name, physical address, date of birth, social security number, and account information. State that you are disputing the accuracy of the information provided under the provisions of ‘The Fair Credit Reporting Act’. Follow up the preceding step by asking the provider for a 100-word statement on why it is so, for instance, “This is not my account” or “I do not know this account. ” Request the provider to verify the details of the account in question.
4. Go through the same process of disputing with all three credit bureaus which includes Equifax, Experian, and TransUnion. Still, each bureau should receive its dispute letter. According to federal law, they must look into your disagreement within 30 days. Unlike other people who quit if they lose on the first try, in protracted social conflict, it is best to continue. Just continue disputing until the collection is deleted, or, in this case, the account.
5. Take your complaint to the Consumer Financial Protection Bureau if the credit bureaus persist in verifying information that is wrong after you have demanded that it be removed. This informs the bureaus that the CFPB will scrutinize your complaint and therefore may step up efforts to correct the errors. This can motivate them to withdraw collections they have no strong evidence to support or defend.

Conclusion

It is not good to have negative items such as collections in your report since it gives you a poor credit status and restricts your monetary options. However, dealing with collections is frustrating, yet with the right approach it is resolved and things are made to turn rapidly. Ensure that reports are not inflated or inaccurate by reviewing them, contacting collection agencies to repay or negotiate for debts, fighting for collections that remain, and seeking help from the CFPB where necessary. After a little effort, it is possible to increase your score and leave behind the scourge of collections.

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