How To Remove Paid Collections From Credit Report

With 10% of 18 to 29 year olds sitting on credit card debt that’s over 90 days overdue, it’s no surprise that many are asking about their credit scores. In fact, US debt is rapidly increasing for all age groups. Furthermore, as anyone in debt knows, it can quickly become overwhelming and terrifying. Debt collectors are ruthless in following up. You might therefore want to consider working with credit repair companies to help you out. 

What is a Paid Collection? 

• A paid debt that was overdue
• Can be either a full or partial payment 

It’s worth noting that paid collections refer to an overdue debt that has now been settled. The reason the information stays on your credit report is that it’s a piece of information that helps future lenders determine how they want to work with you. For example, they’ll charge a higher interest rate if they feel that you’re a bad debtor with a lot of historical collections. 

Whatever situation you’re in, it’s always useful to try to pay off any debt that you have. You can do this partially or in full depending on what you can agree with your lender. Of course, this becomes a bit more difficult if you’re dealing with a collection agency but it’s still worth a shot. 

How to Remove Paid Collections from a Credit Report

• Dispute the amount
• Wait 7 years
• Other Options to Improve your credit score

Dispute the amount

The first step in trying to remove paid collections from your report is to dispute the information. Naturally, if the information is correct then there’s nothing you can do about it. Nevertheless, many errors do happen so it can be helpful to verify everything. 

Having said that, you can also use something called a Goodwill Adjustment or a Pay for Delete letter. These documents are negotiation tools to ask your lender to remove the negative information from your report. If you have a great history and this is a one-off mistake then you might be able to appeal to their goodwill. 

Alternatively, you can use the Pay for Delete letter. This approach allows you to offer to pay off a certain amount of your debt in return for them to remove the information from your credit report. Of course, they don’t have to agree to either option but you never know without trying. 

Wait 7 years

If you’re not in a hurry to ask for a loan or a mortgage then you could simply wait. As per the Fair  Credit Reporting Act, all bad debt-related information will disappear after 7 years. Although, take note that some debt information will only drop off your report after 10 years. You can check all this with the credit bureaus though. 

Other Options to Improve your Credit Score

Clearly, not everyone will be able to wait 7 years. Therefore, there are other things you can do to try to improve your credit score, as listed below: 

Experian Boost

This program was launched to help people improve their scores by leveraging their utility and phone bill information. The idea is that your average score will improve simply by including all those on-time payments into your credit report. Essentially, Experian is offering to consider everything when reporting your credit score and not simply relying on loans and credit cards. 

Pay unpaid collection accounts

The most obvious approach is to pay off your debt although this won’t be an option for a lot of people. If you’re struggling then this might be the time to consider working with credit repair companies. 

Keep unused credit cards

One of the key criteria that helps your credit score is your credit utilization ratio. By keeping unused credit cards you’re essentially enlarging your pool of debt so that your used-up debt looks proportionately smaller. You should therefore also try to keep any used credit card amount down to as small a number as you can. 

Join a credit union

A credit union is a bit like a commercial bank. However, there’s a big difference because it can be more relaxed in how it qualifies people for loans due to its nonprofits status. This might therefore help you access a more favorable loan than, for example, relying on credit cards and their higher rates. 

How Credit Repair Companies Can Help

• Manage the whole process on your behalf
• Advise and lead you through any legal proceedings

The great advantage of working with credit repair companies is that they’ll deal with all the paperwork and any necessary legal proceedings. They’re experts in legal terminology attached to debt. They’ll also know how to find the right approach that works for you. 

However, make sure you choose yours carefully by checking that it’s certified with the Department of Justice. Unfortunately, there are scams out there. Although another good check is to review their rating on the Better Business Bureau website. 

Final thoughts on Working with Credit Repair Companies

Dealing with debt and collection agencies can be very stressful. There’s no better way to give you peace of mind than by working with credit repair companies though. Of course, you can do everything on your own but why not get an expert by your side? At least you’ll have a strategy for moving forwards and you might actually sleep better at night.