No one wants the telltale mark of unpaid debt on their credit report, but that’s exactly what a collection account is. While these negative marks stay on your credit report for years, you don’t have to sit idly by and count the days until they disappear.
Here are a few proactive strategies for removing collections from your credit report.
Can Collections Be Removed From a Credit Report?
It is possible that a creditor will remove a collection amount, but you’ll have to make a convincing case. Here are three options:
- Dispute any errors. About 20% of consumers have an error on their credit reports, and for many, disputing the error ends in a positive resolution. If the collection on your account is wrong — meaning the account is not yours or the amount is incorrect — be proactive and dispute it. You can dispute the collection error by contacting the credit reporting agency either online, by mail or by phone. And what if a collection doesn’t fall off your report after seven years? A dispute is how to remove outdated paid collection amounts as well.
- Ask for a goodwill adjustment. This option, which has the highest success rate for a person with a solid credit history, requires you to write a letter to the creditor explaining why the collection occurred and asking for it to be removed. You’ll need to pay off the debt first and compose your letter in a positive, professional manner.
How Long Does It Take for a Collection To Be Removed From a Credit Report?
A collection remains on your credit report for up to seven years. The clock starts ticking on the date the original debt became delinquent and was not brought current. That first date of delinquency determines when the collection is removed. Your credit report may list both the original creditor and the collection account — both should roll off your credit report at the same time.
How Will Your Credit Score Be Impacted?
There are several factors — the age and size of the debt, in particular — that will increase or decrease the impact on your credit scores. The most damage to your scores occurs when the collection first appears on your credit reports. Paying off a collection within the first 24 months can help to offset some of that damage to your scores. The good news is, as with most negative information, the negative impact to your credit scores fades over time.
Keep in mind that your credit score is only one factor in a lending decision. A lender may still react negatively to old, unpaid collection accounts. If you have a collection account on your credit report, take steps to rectify it.