How to Remove Collection Accounts from Your Credit Report

Do one thing: You shouldn’t ask to remove collection accounts without a legitimate reason, such as that it has been more than seven years since the debt was incurred.

Why Removing Collection Accounts Matters

While we all know mistakes can happen, finding errors on your credit report can be especially troubling since they can hurt your credit score and may also be a red flag for more serious issues such as fraud and identity theft. 

Errors on Your Credit Report Can Happen

A consumer survey found that more than 25% of participants found serious errors when they checked their credit reports. So if you review your credit report and discover a debt that has gone into collection and it isn’t yours, it’s important to address the mark on your credit report as soon as possible.

Learn more about the credit score impact of collections.

Collection Accounts on Your Credit Report

When you see terms such as “in collections” on a credit report, that typically means an unpaid debt has been placed with (or sold to) a collection agency because it was delinquent by more than 120 days. 

How long does a collection stay on your report?

Collection accounts can remain on a credit report for up to seven years from the original delinquency date in most states. Bankruptcies can remain on your credit reports for up to 10 years.

Dealing with Collections on Credit Reports 

Certified financial planner Alvin Carlos, CFA, a managing partner with District Capital Management in Washington, D.C., says if a collection is inaccurate, you should first dispute it with the credit bureaus. You can do this, he says, by clicking a link on your digital credit report. 

Check With The Three Main Credit Bureaus

If you have identified the collection on one credit report, make sure to check on your reports with all three of the main credit reporting bureaus — Experian, Equifax and TransUnion. You can do this most quickly by downloading the digital documents from annualcreditreport.com. 

• Credit pro tip. You want to check with all three agencies because not all collections are reported to all of the bureaus. (This way, you won’t waste time communicating with an agency that did not report on the collection.) 

Draft a Letter to Remove Collection Accounts

If you want to have a paper trail for your case, you can opt to send written letters disputing the error via registered mail. Some consumer financial advocates say this is the best way to have a mistake corrected.  

• Write a letter to each of the credit bureaus where the error appears, explaining what happened. 
• The Federal Trade Commission provides sample letters for this purpose.
• Once the letters are delivered, the credit bureaus have 30 days to respond.

• You can also dispute the collection with the company that reported the debt to the credit bureau. 
• So if the collection was from a Mastercard account with a bank or lender you have never done business with, also send a letter to the lender asking for the mistake to be fixed and the collection removed. 

Keep Good Records

You’ll also want to make copies of the letters you send, and any supporting documentation you use, such as a copy of your checking account statement showing where payments were made, etc. Keep everything together in a file for safekeeping.

Advocate for Yourself

If a credit bureau responds and says they won’t correct the error, you can gather more data and try again. In these cases, it helps to find more evidence to include with an updated letter.

More Options to Remove Collection Accounts

If a second letter and more supporting details don’t work, you still have options. 

• You can contact the Consumer Financial Protection Bureau (CFPB), a government agency that accepts complaints.
• If the CFPB is unable to resolve your legitimate claim, you can sue under federal law. Some attorneys specialize in this area.

Does Paying the Collection Help Remove Collection Accounts?

If you have a collection listed on your credit report that is accurate and you would like to remove it without waiting seven years, you also have some options. You may be in a situation where you are trying to improve your credit score so you can qualify for a better rate on a loan – or qualify for a loan period.

When it comes to paying a collection off, Carlos says, there are a few things to consider. That’s because it often depends on which credit scoring model your lender is using. “The newer ones ignore paid collections,” he explains, “so paying can genuinely help. Older models still count them even when paid.” 

Do Different Scoring Models View Collections Differently?

You would need to check with the lender you are working with to see which scoring model the company uses. The main scoring models typically used for consumer loans are developed by VantageScore and FICO, though each has several versions currently in use.   

What about pay-for-delete agreements?

A pay-for-delete agreement, says Carlos, is when a collector agrees to delete the (debt) entry in exchange for payment. He suggests getting an agreement confirmed in writing before you pay a penny. 

Unfortunately, there are no guarantees that using a third-party company to help you delete the collection will work in all cases. That’s because a firm may ask a credit reporting bureau to remove a collection, but that doesn’t mean the bureau will do it.

Goodwill Letters May Help Remove Collection Accounts

Depending on the circumstances, you can:

• Write a goodwill letter to a lender or credit reporting agency.
• Explain what happened to cause the collection in the first place.
• List any steps you have taken to settle the debt – such as paying it off.
• If there was a health issue or other emergency, you can make a case using that information when you ask for the collection to be removed.
• It may be a long shot, but the answer is always no if you don’t ask.

With Reporting by Casandra Andrews