I guess you’d agree with me that the credit report is one of the most vulnerable things out there. You forget to pay your balance in time. The creditors send the report to the bureaus, and credit score gets hurt. You close an account against an expired card. Your credit limit goes south hurting your score.
To put it mildly, you don’t watch out for the stick, and the credit score bears the brunt. In my previous article, I discussed how old debts can hurt your score, and how you can write them off. In another article, I discussed at length how to remove late fees from your credit report.
In this article, I discuss how to remove a collection from the report.
Look for errors
The same thing that I advised you to do for the removal of late fees. First, get copies of your credit report from all three bureaus, and then carefully go through them. Search for inaccurate entries on your credit report. It’s quite likely that you find a mistake on the report. That’s because drafting a credit report is complicated, and the bureaus or the creditor might make some errors.
Erroneous entries are most likely to be the account number, the balance amount, the account opening date, the status of the account (oftentimes, closed accounts are shown current), the credit limit, the payment status, etc. What to do after you spot an error? Dispute the collection. Write a letter to the bureaus requesting them to remove the collection from the report.
Negotiate with the creditor
Negotiating with creditors over removing collection is different than negotiating with them over the removal of late fees. When a creditor commissions a collection agency, he sells the debt out to the agency, which means the collection agency, after acquiring the debt receives a share of it.
When negotiating with the creditor, you might get the reply that the debt has gone to the collection agency and there’s nothing they can do about it. If you get such a reply, ask the creditor whether the collection agency is a separate company or one of its departments. If it’s the latter, then insist them to remove the collection.
What if the collection agency is a separate enterprise? Then you need to
Contact the collection agency
After you contact them, ask them to validate the debt. Collection agencies have a bad reputation. They are infamous for adding extra fees to a debt. If the entry is old, then they may not be able to validate it. The catch here is if you want the agency to validate the debt, then you’d have to ask them to do that exactly within a month from the date of your initial contact.
Contact the collection agency once you are fully sure the dispute over the debt validation process will go in your favor. If you are convinced, write to the collection agency. If you don’t get a reply from them, that’d probably mean they can’t validate it.
That’s when you should be pushy. Insist them for debt validation, or else you’ll take them to court. Do mention the Fair Debt Collection Practices Act in your letter because the act gives protection to cardholders.
Dispute the collection
Section 623 of FCRA allows you to dispute negative items such as debt collection on your credit report. You dispute it with the creditor. The legal process requires you to request an investigation of the collection account. Within 30 days from the day of requesting, the consumer has to respond.
Can you dispute it with the credit bureaus? Yes, you can. In fact, experts recommend consumers to first dispute it with credit bureaus. If you do that, then collection agencies will find it difficult to produce documents to establish their claim. The process is simple. You send letters to the credit bureaus requesting them to investigate a collection.
Settle the debt
Try it only when you have tried all other methods and failed. The process of settlement of debt is simple. You pay the collection agency, and they reduce the debt amount, so you find it easy to pay it down. If the collection agency agrees to settle the debt, insist them to remove the listing from the report.
What do you think of the 5 ways discussed here? Would you follow them to remove collection from your credit report? Let us know in the comment section.