Cleaning up your credit report can help you achieve your financial goals. In most cases, collection accounts remain on your credit report for up to seven years. This is often too long to wait if you need to make a big purchase or want to apply for more credit.
While it is not guaranteed you can remove every collection from your report, educating yourself on the process can give you a head start. In many cases, and with the right repair specialists behind you, it is possible to remove all of the derogatory information on your credit report.
The promising news is, even if these steps won’t remove all of the collections on your report, they will inevitably remove some of them. And removing even a few collections from your report can have a big impact on your creditworthiness.
Do Your Research
The very first step to take is to do your research. This includes ordering and reviewing your own credit reports, as well as reviewing your own records of past debts you’ve paid off.
There are three credit bureaus in the United States reporting a credit score on you: Equifax, Experian, and TransUnion. Pull and print your credit reports from each of these bureaus, as they often vary.
Make a note of any differences and discrepancies between the three credit reports. Different lenders report to different credit bureaus, so the reports will likely vary - even if only slightly.
Highlight any derogatory credit remarks or accounts in collections. These are going to be the biggest contributing factors to a lowered credit score and therefore are the ones to tackle first.
If you aren’t sure where to pull your credit reports from, beginning with a credit repair company at this stage can be very helpful. A credit repair company will help you pull all three of your credit reports and will review these with you.
Dispute The Errors
Any errors you find on your credit report can be disputed, removed, or corrected. However, you need to be the one to initiate this process. The credit bureaus and lenders will likely never reach out to you noting they’ve made an error and corrected it on your behalf.
To dispute an incorrect collection or error on your report you need to write a formal dispute letter. The dispute letter must include the following information:
- Your personal contact information including your full legal name, your mailing address, and the best number to reach you.
- A clear and concise explanation of the mistake(s) you found.
- A clear explanation of why you feel the information is incorrect or untrue.
- A copy of your credit report with the error highlighted or marked.
- A formal request for the incorrect information to be removed from your credit report.
- Any supporting documentation you have proving the information is incorrect.
Since the three credit bureaus operate independently of one another, you will have to do this process separately for each one. Dispute letters are time-consuming. Enlisting the help of a credit repair company will help save you the time and headaches of compiling these dispute packets.
Validate Any Active Collections
If you don’t find any errors on your credit report, the next step is to remove any collection companies present on your report. It is extremely common for third-party agencies to purchase past-due debts from other businesses or lending companies. Luckily for consumers, with the frequent shuffling around of information from one company to another, vital information is often misplaced or lost.
It is within your consumer rights to request that any active collection on your credit report be validated by the lender. Even if the lender reporting the collection is not the original lender of the debt, they still must validate the debt as yours.
Once a debt collector receives a request to validate a debt, they must immediately cease their collection efforts until they reply to your request. If they can’t validate that the debt is yours, they are obligated to remove it from your credit report.
Throughout this process, both the debt collector and debtor must follow various timelines and rules. For example, requests must be made within a certain time frame and replied to within a certain timeframe.
Validating debts in hopes of getting them removed is most successfully done with the help of a reputable credit repair company. They will ensure that all timelines are being met and that the validation received from the debt collector qualifies as genuine proof.
Get Paid-Off Collections Removed
What if you have a debt showing up on your credit report that you already paid off? This is often one of the most frustrating types of derogatory remarks on a credit report. You paid the debt and the account is closed, yet it still poses a negative impact on your credit score.
Rest assured, even paid debts that are still showing up on your report can be removed. Even once a debt is paid off, it can remain on your report for an additional seven years. This is why it’s critical to review your report thoroughly to remove all paid debts.
In such a case, you must write what is called a “goodwill letter” to the lender. These letters do not need to be as detailed as debt validation letters. However, they do need to accurately identify the collection, show proof it has been paid off, and explicitly request removal.
Keep in mind, lenders and debt collectors are not obligated to remove paid-off and closed accounts from your credit report. Many will do so as a courtesy if the debt is paid off and a goodwill letter is received. But, they do not have to.
Utilizing a credit repair company that is experienced with drafting goodwill letters is extremely helpful in these instances. Their experience and expertise improve your odds of getting paid off debts removed from your report.
Don’t Face Collections Alone
Credit Glory help you review your reports, explain which debts qualify for removal, and help get the process started. You don’t need to take on lenders, debt collectors, or credit bureaus alone. Reach out to the specialists at Credit Glory today.
