How to remove collections from a credit report for free
Would you like to know how to remove collections from a credit report for free? You should have already received your annualcreditreport.com, free copy of your credit report. Then tried to dispute something on line, and then addressed your onetime thirty day late on open active accounts.
Now we are going to talk about how to handle collections. The best way to handle a collection is to not have one. The collection companies are required to send you a letter prior to reporting that collection on your credit report, at least thirty days before reporting it. So you have time to address it, so as soon as you get a collection letter there is no reason not to address it at that time. Never ever ignore a collection notice when it arrives. The best time to handle it is before it is reported.
Everyone gets a collection letter and I know that sometimes you are not sure if it is real or not so you toss it. OK, so it finally got on your credit report, now what do you do. If The collection is very recent, if you happen to catch it right when collection showed up or within the first few months you are going to want to pay that right away. (Please note this will have a negative short term impact on your credit score but over the next few months your score will improve.)
When you offer to pay it you should ask the collection company to remove the account from your credit report. Say something like “I did not get the notice” or whatever the honest answer is “I did not know if it was real” Offer to pay it this for you but you have to remove it from my credit report. Most of the time they will agree to remove the collection it is called a “Pay for Delete” opportunity.
The Collection company is not required by law to report the credit information. If you make the offer to pay the collection, the collection company should be willing to remove it. Of course prior to paying the account you must get it in writing that they agree to correct the reporting to all three credit repositories as “reported in Error”. If you have already paid the collection amount you cannot go back and ask them to remove it after the fact. Nine times out of ten they will not even talk to you.
If you had a recent collection within six month go ahead and pay that off as time goes by the date reported will sunset on your credit score and it will take a couple years before it has very little effect on your credit score and then fall off within seven to ten years.
Now let’s say you had a collection account that was a few years old. The same rules apply, you are going to call the collection company and say, “I will pay this off if you remove this from my credit report” it is very important that if you are going to make the commitment to pay it off that you get something back. If you pay an old collection that had not reported in a long time what will happen is that that old collection will have a new reporting date. So really if you pay an old collection you are going to wind up hurting your credit score in the short run without the “pay for delete”
When you pay an old collection you make that collection more relevant to your credit score because it has a new reporting date. So you want to be very careful when handling collections it is a big mistake that many people make. When future home owners plan to apply for a mortgage they incorrectly believe that “I guess I need to pay off all these collections to get a mortgage” and they kill their score. Those people don’t get the mortgage they wanted and have to wait sometime a year or more for their credit score to recover. If there is a collection you don’t recognize than you can try the “verification of debt” letter you can click here for my view on Validation of Debt letter. That is how you handle collections being very careful on how you handle them it will affect your credit score greatly if you take an old collection and make it more relevant to your credit score today.