Unpaid Debt: Getting Unfair & Inaccurate Items Taken Off Your Credit Report

One of the major challenges consumers have that gets in the way of financial freedom is debt. Even worse, unpaid debt may result in a statement on your credit report marking you as delinquent on an account, meaning your payments are overdue. Being known as delinquent on payments may negatively impact your credit score and lower your ability to qualify for new lines of credit. 

A study by the Urban Institute revealed an estimated 35 percent of Americans in 2013 had unpaid debts that were sought by collection agencies, which is on par with the level measured by the Federal Reserve in 2004.

Consumers who may have lost track of all their debt should contact the three credit reporting bureaus and access their credit reports. While debts may be hard to shed, there are ways to limit the effects money owed will have on your credit score, including removing unpaid debt. 

Here are ways to get unpaid debt taken off your credit report:

Confirm the Balance Is Paid in Full
While it may seem obvious, consumers should make sure their credit report is correct when reflecting any debts – from a mortgage to medical bills. You should see a zero balance for bills that were your responsibility to pay for. However, mistakes can happen and when they do, you should contact any businesses or organizations that made the charges to determine whether errors occurred. After paying off a debt entirely, you should request to see your credit report to confirm your balance is paid in full to begin to see changes in your credit score. 

Negotiate for a Payment Plan
Many collection agencies are willing to help you figure out a payment plan that will allow you to gradually pay off your balance, which could reduce the hit debts have on your monthly income compared to paying in one lump sum. On the other hand, some agencies will even reduce the remaining balance if you pay them the whole amount at once.

Ask Whether Collectors Will Report the Debt
Although many organizations, such as hospitals, will not report debt to the three main credit reporting bureaus, collectors usually do. However, you could ask a collector whether they will report the debt when it is paid, according to Kiplinger. You can also wait for the debt to become less important over time. After a certain amount of time, the collection account will disappear from the credit report. Consumers can expect agencies to remove collection amounts after seven years from the date when you initially defaulted.