Removing collection accounts on your credit report is a process but important to undertake.
A few years ago, I reviewed my credit report and found a collection item reported. I researched further and discovered the item was an error. I filed a dispute and went back and forth until the error was corrected. But it took over 3 months and with a great deal of frustration.
Today, I am more knowledgeable about the steps you can take to fix inaccurate collection items showing up on your credit report.
So, if you discover a collection account on your credit report that you don’t recognize, this is the article for you.
Federal Credit Reporting Act Protections
One thing I want you to understand is your consumer rights and legal protections under the Fair Credit Reporting Act (FCRA). The following two provisions pertain to collection accounts:
- You have the right to dispute incomplete or inaccurate information. If you identify information in your file that is incomplete or inaccurate and report it to the consumer reporting agency, the agency must investigate unless your dispute is frivolous.
- Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Inaccurate, incomplete, or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has deemed accurate. Source: FTC
The responsibility falls on you to ensure the accuracy of your reports. After discovering a collection account, you must dispute or settle the debt.
Steps to Remove Collection Accounts
Follow these steps to remove collection accounts that don’t belong to you from your credit report.
Step 1: Pull your credit report online
Request your credit report on AnnualCreditReport.com. This is the only federal law mandated website to access free copies of your report from all three credit bureau. For simplicity, request a report from one credit bureau and follow the steps (then repeat). Print the report. Use a highlighter or pen to mark up collections discovered.
Step 2: Review the information
Do your research and really take the time to think about the reported collections. The more you know or the more certain you are the collection item is not yours the better this process will be for you. Circle the name of the agency and contact information, and amount of collections.
Step 3: Call the collection agency
Determine if the collection account was placed in error or a paid collections still reporting as an active collection. Call the collection agency and request more details. Ask about the original debt owner and other details. The collection agency should have all this information. You do not need to provide any additional information. Your goal in the call is to get information from them, not the other way around.
If the collection is inaccurate, dispute the collection directly with the credit bureau. They will be required to research the issue and report back to you of their findings. If you have any supporting documents to back up your claim, then attach them to the dispute. For example, you never lived in the address associated with the debt.
If the collection is accurate, then it means you owe the money. You can pay the total collection due or ask for a settlement amount you can pay off in one payment. Ask the representative you’d like a “pay for delete”. The “pay for delete” is considered a delete clause–upon payment, the collection record is deleted.
However, collection agencies may respond by stating they are unable to remove negative information which is true to an extent. Accurate information needs to remain in the report until the law requires their removal. A paid-off account that’s reporting as unpaid is inaccurate and can be disputed.
Step 4: Get the agreement in writing
Ask for a verbal and written, or emailed agreement. Additionally, make sure you take notes of the person you’ve spoken to, the dates, times, and a brief synopsis of the conversation. This can help you escalate a dispute if needed. Remember, you must comply with the agreement so don’t agree to anything that you cannot do or afford.
Step 5: Review the same credit report
After you’ve met the agreement terms, dispute the reported collection account with the credit bureau. The credit bureau will then request information from the collection agency. Depending on the information obtained from their request, you will see the collection account updated or deleted. If the credit bureau fails to respond within the 30 days mandated by the FCRA, they are required to remove the unverifiable information.
In the event, the collection account remains but is now reporting a $0 balance, you can dispute the inaccuracy again with the credit bureau. Provide your notes and the “delete clause.” Contact the collection agency and take notes of the agent’s name, the date, time, and details of the conversation again.
How to Escalate a Dispute to Remove Collection Accounts
If you are unsuccessful in removing the collection account, stay focused and continue to dispute with the credit bureaus, periodically. Escalate the dispute by sending a certified letter via USPS.
Stay calm. Continue the dispute process directly with the credit bureau and provide any updated information.
One thing to keep in mind, credit bureaus are not your enemy. They only report information shared with them. It is up to you to maintain the accuracy of your credit report. Persistence and consistency can lead to a satisfying result.
Reviewing your credit reports annually is necessary and using a free credit monitoring tool is quite helpful.
Will you see your credit score increase significantly? Chances are you’ll see an increase but by how much depends on other information in your credit report.