When your debt has gone to collections, it can have a major negative impact on your credit score. If your credit score lowers, it can impact your ability to sign a lease, acquire personal loans, open new credit cards, and more. Being shackled to a low credit score can leave you desperate for a quick credit fix!
There are ways to increase your credit score that are completely legitimate. You can remove inaccurate or outdated collections from your credit reports–but if the collections are accurate and timely, you will need four years until they fall off.
How to Remove Collections From Your Report
You can remove outdated or inaccurate collections items from your credit reports either by yourself or with the assistance of a reputable credit repair company. We recommend avoiding any credit repairers who ‘guarantee’ that they can increase your score, because legitimate, expert credit repair specialists cannot promise specific outcomes.
At The Phenix Group, we believe in empowering individuals to take control of their credit through education and guidance. Good credit standing starts with you feeling informed and confident in your approach to your credit, no ‘magic wand’ necessary.
Let’s walk through the steps to remove inaccurate or outdated collections from your credit report to increase your credit score.
Request Evidence
The first step to removing inaccurate items on your credit report involves investigation. Creditors and collectors need to provide evidence that the debt owed genuinely belongs to you.
To validate the authenticity of a debt, you must request a validation letter from the collection agency. This letter will provide detailed information about the debt owed. If the collector or creditor cannot prove you owe on this debt or there are errors in their evidence, you can begin the process of disputing the debt with the three credit bureaus: Equifax, Experian, and TransUnion.
Search for Inaccuracies
Unfortunately, even creditors and collection agencies make mistakes. In some cases, the agencies improperly evaluate the amount owed or accidentally label someone else’s debt as yours. To avoid liability for another’s debt or an inaccurate amount owed, review your credit reports regularly.
In general, this is good practice to get into regarding negative items beyond just collections. Mistakes can happen with any items on your credit report, and catching them early can prevent issues down the line.
Once you spot inaccuracies or outdated information (in Pennsylvania, the statute of limitations is four years), gather your evidence for your dispute. With the help of The Phenix Group, you can quickly identify inaccuracies or outdated information, collect your evidence, and submit a letter of dispute to your collections agency.
The agency is then required to investigate your dispute and remove the collection if they cannot verify its accuracy within a specific timeframe.
Request a Pay-For-Delete Agreement
Many owers don’t realize they can negotiate with collections agencies. With the assistance of a credit repair company, you may be able to negotiate a Pay-for-Delete agreement with your collection agency. This agreement states you will pay the entire debt or negotiate a settlement amount in exchange for the agency to remove the collections item from your report.
However, take caution with these arrangements. For example, never start making payments on the deal until the terms are clearly laid out–these are not legal agreements. Your debt collector is not obligated to follow through with the deletion once you have made your payments, and the collections account may reappear on your report. In this case, you will have to wait until the statute of limitations is up for it to be removed or fall off your report.
Send a Goodwill Letter
With the help of The Phenix Group, you may be able to get the collection item removed from your report even if you’ve already paid off the debt without a Pay-for-Delete agreement. You can draft a goodwill letter with the help of a credit expert and request your creditor remove the negative collection item. Although this typically works best with delinquencies rather than collections, there are no repercussions for trying.
Keep in mind that late payment reporting information may remain on your report, but removing the collection itself could give your credit score the boost it needs.
Rebuild Your Financial Future
Managing your debts and credit can be overwhelming, especially when a low credit score gets in the way of life’s major moments. Gain clarity and insights with The Phenix Group today, and feel empowered in your financial future!