It is also a relatively frustrating experience to have a collection on your credit report. A collection takes place when you are unable to make the payment on a bill that you owe to a creditor or service provider. If after a few months of payment delays, the creditor can take your account to a collection agency. The one thing that is left for the collections agency is to attempt to recover the amount you owe.
This usually takes 180 days or more then the collections agency can report it as a bad debt on your credit report. This will appear in your credit report which will in turn affect your credit rating. Fortunately, it is possible to remove collections from your credit report by following these steps: Fortunately, it is possible to remove collections from your credit report by following these steps:
1. Pay off the Collection If negotiations concerning a collection are needed, then these should be conducted before a payment is made
The best method of removing a collection from one's credit report is by negotiating with the collection agency and making payment for the amount owed. Amazing as it may sound, paying off a collection even in full will be beneficial to your credit score.
Some creditors are willing to work with you and accept less than the total amount you owe on the account; you should call the collection agency and discuss your situation with them. To avoid falling victim to a scam, ensure to receive any settlement they propose in writing before effecting a payment. Once paid, the collection must be deleted from the credit report within 30-45 days as per the FCRA or Fair Credit Reporting Act.
2. Dispute the Collection
But if you can’t afford to pay the collection amount, then do not hesitate to dispute the collection. You stand a chance to challenge this if you feel that the information the collections agency provided was misleading or could not be proven.
Compile the records from the credit bureaus, Equifax, Experian, and TransUnion, and the collections agency and compose the dispute letters. It would be crucial to state clearly the specific information that you want to be contested, the reasons as to why you are contesting that information, and then proceed to ask for an investigation and eradication of the information in question. Accompany your contention with copies of any supporting evidence that you feel is relevant to the issue.
The law dictates that the credit bureaus have 30 days to investigate the matters raised. If he/she fails to prove the accuracy of such items, or if it cannot be verified, then the collection must be deleted from your credit reports within 30 additional days.
3. And the contention is the evidence that must be presented to support your case in court
In case a complaint fails to be approved to get a verified collection deleted, then one must consider legal action against the collections agency. This legal process results in removal, though you need to provide strong evidence and reasons in your case.
The process would require you to seek legal action and explain that you never owed the stated amount of debt. Or that the collections agency was unlawful in their actions and they have breached the provisions of the FDCPA or any other laws on debts. It is possible to challenge such violations in a court of law which could lead to the deletion of the negative credit information.
However, it should be understood that court cases can sometimes be long, and at times, the judge may rule in favor of the defendant. Attempting to sue with legal aid from a consumer rights attorney can help improve the chances of winning the case. However, even if you don’t have a lawyer you can sue in the small claims court for low charges.
4. Negotiate Debt Forgiveness
If you cannot afford to repay medical bills or any other form of debt in collection, try to pay a lesser amount than the actual value or the total amount due. Most of the time, creditors and third-party debt collectors will accept offers for settlement because it is better for them to get something out of it rather than receiving nothing at all.
Any settlement for less than the full amount must be documented by putting the agreement in writing before having it paid. The letter should be clear to indicate that your payment will cover the balance to the last cent. This will require the collections agency to report to the credit bureaus the debt forgiveness of the remaining balance of the debt.
Afterward, the credit bureaeons will adjust the collection on the reports to show that the balance is zero. When you have settled those debts, credit scoring systems may eliminate collections from calculations while it will remain on your reports for the next 7 years.
5. Count Down the Remaining Years on the Reporting Period Requirement
If other strategies do not work in getting rid of an unpaid collection then the last resort of patience and amount of time will do the work for you. In line with the FCRA, credit collections remain legal for credit reports and may be reported for up to seven years from the first missed payment.
In the end, the collection will be removed from the credit report after the complete seven years’ time, and other creditors will not weigh it when rating your creditworthiness for new credit accounts or loans. This course of action, however, means tolerating the credit score and rejection calamities the collection brings in those years.
Still, it just takes a little persistence to improve your credit health.
Such effects show that having negative items removed makes credit reports and credit scores improve over time. These little wins also take you a step closer to attaining other significant financial objectives such as higher facility of credit.
Be consistent in your efforts and if necessary, do not hesitate to implement several methods to ensure the removal of the unwanted collections permanently. Remember, it is always wise to check your credit reports frequently during this process to oversee the elimination process.
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