Your credit score is calculated based upon a number of factors. Chief among them is the timeliness of your payments. An account having gone to collections reflected on your credit report will have a severely detrimental effect on your score.
Moreover, that notation will stay on your report for seven years, meaning any time you subsequently apply for credit, lenders will see it. The good news is such notations can be removed — in some cases.
Here’s how to remove debt collections from your credit report.
Review Your Credit Report
Before you can do anything about your credit report, you must first know what it contains. Further, you need to keep in mind you actually have three credit reports out there rather than just one. Experian, Equifax and TransUnion — the big three credit reporting bureaus in the United States — each issue their own reports.
While the contents are largely the same, there can be differences between them, so it’s always a good idea to review all three. You can get free copies of these reports at AnnualCreditReport.com. In addition to helping you find potential errors, you can look to see if there are any errors or omissions upon which you can work to help raise your score.
Ask a lender to give you a goodwill deletion if your report contains delinquency issues for which you have reached a settlement with a creditor and fulfilled the obligation. This can sometimes be quite effective, particularly when your credit history is unblemished otherwise.
The request typically takes the form of a certified letter, the goals of which are to get the reader to empathize with your situation, understand the concern you’re addressing is an anomaly and that you take full responsibility for the situation. Identify the cause of the delinquency, point out you’ve paid it in full (or according to the settlement terms if they were negotiated either on your own or through a program like these Freedom Debt Relief reviews describe).
Pay for Delete
Certain types of creditors such as utility companies and medical facilities will delete negative information when you pay the account in full — if you ask. While this is not a guaranteed method, it has proven effective in certain circumstances. To avail yourself of it, contact the entity to which the debt is owed and offer to pay it off in full if they’ll agree to delete the entry from your report. Send the request in writing and if they agree make sure you get that in writing too.
Request a Removal Expedition
Contact the reporting agency directly and ask them to remove the notation from your history. This request will take the form of a certified letter of appeal in which you’ll explain why the debt is listed and the steps you’re taking to satisfy the obligation. Mortgage lenders will often recommend this approach when you’re trying to purchase a home. If successful, you’ll avoid waiting for the full seven-year period to elapse.
Stay on Top of the Situation
Whichever of these methods you choose, one letter alone may not be enough.
Keep trying if you don’t get a response within seven days, and continue asking until you’re told no — at which point you can pen an appeal. Bear in mind, credit reporting agencies live and die by the accuracy of their reports. Getting them to remove debt collections from your file can be an arduous task.
However, it isn’t impossible. Just be patient and keep trying. One more thing to bear in mind: Seven years might feel like a long time, but in the overall scheme of things it’s brief. Be careful to keep your history as clean as possible in the interim and your score will rise significantly once that problem falls off your report.