Credit Repair

How to Remove Accounts in “Collection” Status from Your Credit Report?

If your credit report shows debt accounts that are in collection status, it is going to make your financial life very difficult. You won’t be able to get more loans or credit cards. Even if you manage to get one, it will charge you a very high rate of interest. Not only that, it will also restrict your employment prospects; prospective employers may hesitate in hiring you and your current employer may deny you promotions even when you deserve one – all because of your poor FICO score, mainly resulting from the negative entries related to the accounts in collection status. Therefore, it is important for you to do something to remove those entries as early as possible. Following are some of the possible strategies that you may like to try.

Negotiate with the Collection Agency

The best thing you can do to repair your credit report in this regard is to talk to the debt collector and negotiate a deal where you will be making a certain amount of payment (a part of the total amount due), and in return, they will send reports to the credit bureaus requesting them to delete those collection accounts from the report. For this, you can either give them a phone call or send them a formal letter with all the details about the settlement. If they agree, ask them to send you a copy of the agreement in writing.

Pay in Full

If the collection agency does not agree for any such settlement program, the second best option that you should consider is to pay the amount due in full. This is obviously a more difficult task, but considering the severity of the problem, you must do something to arrange fund to pay off the debt in full. But, before you do that, make sure you get a written agreement from the debt collector where they must agree to delete your account from collection status and eventually from your credit report in exchange for the full payment.

Try Getting the Entry Changed to “Paid in Full” If Removal is Denied

Sometimes, the credit bureaus may not agree to remove the entries related to collection accounts from the report. In such cases, you should at least try to get the entries updated and the status changed from “collection” to “paid in full”. Here again, you will need a written agreement from the debt collectors in this regard and you can save yourself from . Make the payment to them only if they agree for such settlement.

What If Even that is Not Possible

If they don’t even agree to change the status of the accounts to “paid in full” even after receiving the payment in full, you should request them to change the status as ““Paid, Settled.” Though it will not significantly increase your FICO score, but it will definitely bring some relief.

If the does not agree to help you with any such settlement program, the last option for you is to pay the debt in full and then wait for a certain period of time during which you will be monitoring the updates on your credit report. If the entries are not updated within 30 days, you can go ahead and file a dispute with the credit bureau. Do not forget o attach the proof of full payment while you file for a dispute.

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Posted in Credit Repair, Fix Your Credit | 1 Comment »

One Response to “How to Remove Accounts in “Collection” Status from Your Credit Report?”

  1. Michael says:

    “Collection status can ever be removed from the credit report”. I came to know only after reading this article. It can affect our credit score badly so it is always good, if we can try to get it to be removed from our report. But it is not as easy as it sounds. Any individual facing this problem should talk to the agency. They can try to do the removal of collection accounts from your report. The agency will do it for some extra amount but the deal should be very clear and should be in writing. Full payment is the best option but the difficult one also. It is good if you can arrange the total amount and do the whole repayment but be sure that agency will replace your collection account with paid in full. Because deletion of collection account is not possible, it will be a better choice to replace it. Settlement process can also be done if any thing is not working. It will be better than the prior collection status. Collection agencies have their own limitations. If they are not able to do as per our choice, “settled payment” will also be a good option.

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