Remove Paid Collections from Credit Report
A collection has the potential to cause severe damage to credit scores. Collection accounts can bar lenders from granting you an auto loan or mortgage. That’s why most people often rush to settle a collection without considering the right approach to doing it.
Paying a collection when it’s already listed on your credit report, such as Equifax report, won’t make it go away. If a paid collection account is still reflecting on your credit reports, you need to follow the proper procedures to have it removed.
Here we address result-oriented ways on how to remove paid collections from credit reports. You can follow these strategies to rebuild your credit score.
Why paying a collection won’t make it go away?
Such questions are very common with credit consumers who want to rebuild their damaged credit reports. Unfortunately, it’s very frustrating for consumers to understand that making a settlement doesn’t make a collection go away.
If you’ve thought about requesting a settlement agreement with collection agencies in return for a collection account deletion. The truth will disappoint you. Most agencies won’t agree to such a settlement type, often called “pay for delete.”
But why won’t they agree, especially if accepting it will attract even more debtors to settle their debts? They’re usually requested by TransUnion, Experian, and Equifax, the major credit bureaus, not to. The collection agencies have signed agreements with credit bureaus, barring them from doing so.
The negative collections act as pressure points used by the collection agencies to make consumers pay their long-standing debts. For instance, most people wouldn’t put much effort to settle a medical bill that’s long overdue without incentives. But if they’re told that delaying the payment further will have it listed on their credit report and lower their credit score, they’ll be alert with their repayments.
How to Remove Paid Collections from Credit Report
It’s usually not advisable to rush to pay old debts. But if you already made a settlement, you wouldn’t want to without getting the paid collection removed. That’s why it’s very crucial that you follow the right process on how to remove paid collections from credit reports.
You can choose to do it yourself or find a reputable credit report company to do it for you. The following is the procedures you can follow to remove a paid collection from your credit report.
Once you completed paying a collection account or you’re up to date with your payment. You can request the collection agency to remove it from your credit report. Write them a goodwill letter via email explaining that you’ve made full payment or are responding positively to the payment. However, goodwill letters often work best with fully settled collection accounts.
In your letter, be brief but let the collector understand your situation. Let them know that you’ve settled the debt. Even so your report’s negative collection mark is barring you from getting, say, a mortgage. Request kindly for them to remove the paid collection out of goodwill.
Take note that there are newer credit scoring models, such as VantageScore and FICO, which will ignore a paid collection. However, some lenders are still using the old formulas that consider a paid collection against a credit consumer.
Raise a Dispute when Collection Agency Sells Your Debt
There’s a possibility that the collection agency handling your debt is not the original owner. Lenders often sell collection accounts to collection agencies. An agency may, in turn, choose to sell the account to another collection agency.
When such an opportunity presents itself, you can raise a dispute with credit bureaus. Should the new collection account owner fail to respond in time, the credit bureaus will remove the paid collection. This strategy can also be used to remove unpaid collections as well.
Wait for The Collection Account to Expire
Like you’ve already seen, paying a collection will not make it disappear from your credit report. When the above first two strategies don’t bear fruits, your next course of action would be to wait. Credit bureaus will remove the collection account from the credit report 7 years after your date of last payment.
According to the Fair Credit Reporting Act, the credit bureaus are allowed by law to continue reporting a collection account for a maximum of seven years. The seven years are counted from the time the original account became due for more than 180 days. After this period, the credit bureaus are required by law to delete any collection account, whether paid or not.
But to be sure it’s been removed after seven years, you should request your credit report and check. Verify that the three major credit bureaus, that is, TransUnion, Equifax, and Experian have removed it.
Seek Professional Assistance to Remove Paid Collection
Seven years is such a long time to wait for the collection account to be removed from your credit report. Within that time frame, you can achieve a lot with your borrowing ability intact. Even if you opt for the goodwill deletion option, there is no guarantee that the collector will agree to it.
The sure way on how to remove paid collections from credit reports is to use a professional credit repair company to handle it for you. A professional credit repair firm has lots of experience and credit repair is all they do. They know how to handle the process faster and deliver results as promised. A credit repair firm like 007 Credit Agent can help you remove a paid debt off your report. We will restore your creditworthiness in the shortest time possible.
To sum it up, don’t rush to pay off an old debt without following the right approach. Paying a collection won’t make the negative item on your credit report disappear. Instead, seek professional help to have your collections removed from your credit reports and lead your life the way you should.