How to Remove Collections from Your Credit Report

April 4, 2019

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The effect of an account in collections can drastically lower your credit score, but luckily, it’s not permanent. This type of account can have a severe negative impact on your credit score. If the information being reported is unfair or inaccurate and can’t be verified, you can dispute them to see if they will come off your credit reports.

What are Collections?

Being sent to collections means the original creditor has given up on trying to collect debt that a consumer owes. Companies write off a percentage of bad debts every year, where it appears the consumer will not pay what they owe. This typically happens after 180 days of no payment. Typically the lender sells the account to a collection agency in order to recoup some of their lost money.

Once a debt is sold to collections, the agency begins their efforts to contact you for payment. Sometimes, collection agencies don’t report the debt to the credit bureaus if it is paid in a timely manner. Regardless of your situation, remember that if you are contacted by a collection agency, that you do have rights.

How collections affect your credit score

There’s no way around the fact that a collection on your report is a big blow to your score and your credit history. Potential lenders see that you failed to pay for so long that a company had no choice but to send you to collections, no matter what your circumstances may have been at the time. This is a huge red flag for anyone assessing you as a credit risk. It sends the message to lenders that a consumer cannot be trusted to repay their debts.

How to Remove Collections From Your Credit Report

Credit repair, which involves disputing unsubstantiated or inaccurate information on your credit report, can be used to address a collection if it is inaccurate in some way. Whether you choose to repair credit on your own-which some consumers are able to do successfully-or you enlist the services of a credit repair organization like Lexington Law Firm, collections listed on your report should be an area you review and consider carefully in terms of improving your credit history.

A collection can be removed from your credit report if:

  • The same debt is reported multiple times on your credit report
  • The account doesn’t belong to you
  • The debt is over seven years old
  • The collection agency can’t prove that the debt is being reported accurately

Should You Pay Off Collections?

A common misconception is that if you pay a collection, it automatically drops off your credit report. This is not true. If the debt is yours and it is accurate, then you many just end up having to pay the debt. Some consumers are able to successfully negotiate a payment for deletion. This is where the debt collector agrees to remove the debt from your credit reports once it’s been paid. However, this isn’t something that creditors have to agree to and they don’t always do this. If a collection agency does agree to this though, be sure to get the agreement in writing so that you can use it later on if the account doesn’t come off your reports.

How to Avoid Collections

Sometimes, life deals us blows, but if possible, it’s best for your credit and your finances to avoid collections. Here are some steps you can take to avoid collections:

  • Track your spending to create a monthly budget and cut down on unnecessary expenses. There is a slew of budget tracking resources available on the internet, and many of them are free.
  • Consider debt consolidation if you have trouble keeping up on minimum payments.
  • Try negotiating with creditors before your account is sent to collections. If you cannot make your minimum payments for good reason, reach out to them and explain your case. You never know until you try—and this is something certainly worth trying. The creditor may be willing to negotiate a new payment plan with you, allowing you to avoid being sent to collections.

Repairing your credit can be a daunting task, but it is possible with hard work and patience. The attorneys at Lexington Law Firm specialize in credit repair, and we want to put our expertise to work for you. Contact us today for a free personalized credit consultation.

Call For A Free Credit Consultation

Lexington Law has helped clients work towards fair and accurate credit scores by leveraging their rights. We’ve helped hundreds of thousands of clients remove unfair, inaccurate and unverified accounts from their credit reports.

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