Dealing with Collection Agencies

A collection, also known as a charge-off, is an old debt the original creditor has given up trying to collect. At the point your debt becomes a charge-off, it is sold to a third party collection agency. Collection agencies are hired because they are experts at getting you to pay.

How Damaging Will a Collection Be to My Credit Score?

Once a debt has been sold, the way it is reported on your credit record changes from bad (late bill) to terrible (collection). Collections may appear in various forms on your credit report including: unpaid collection, paid collection, or collection – paid or settled for less.

A collection ” even if paid ” alerts lenders or employers that you defaulted in the past. Lenders look for behavior like this as a prediction of future behavior and potential for default.

Can Collections Be Removed?

The short answer is YES! Collections do not have to stay on your credit report for the next 7 years. Quite the opposite is true.

A collection will remain on your credit report for as long as the credit bureau or creditor reports it. Consequently, it is up to you to persuade these companies to report accurate positive information! In other words, you ultimately control how long a collection stays on your credit report.

Under the Fair Credit Reporting Act (FCRA), you have the right to challenge any negative entries listed on your credit report. A copy of your credit report will need to be obtained in order to review the listed information and determine which collection agencies are present. You should not expect your credit reports to be the same as the credit bureaus maintain a separate file on your credit activities.

Ultimately, you will need to dispute every negative entry on your credit report. Often, following this procedure will result in the removal of several negative entries with no additional follow-up.

If a Dispute Does Not Work, What Next?

If you cannot convince a credit bureau to erase a negative collection from your credit report, you might want to consider obtaining some legal guidance as you move forward. An attorney who is knowledgeable in credit matters can be invaluable at this stage of the game.

Discover how I raised my credit score from 582 to 745 in four months with the help of Lexington Law. Learn the truth about quickly and effectively deleting bad credit at www.creditforcouples.com.