How to remove collections from your credit report

Dispute collections on your credit report

Some collections reports on your credit history may contain inaccurate information. If you review your credit profile and find a collections report that you don’t agree with or are unsure of its accuracy, you can dispute it directly with your creditor or the credit bureau itself. Here’s how:

Step 1: Review your credit report

It’s important to download your credit report from the three major credit bureaus to review which ones have collections reports. You can get a free copy each year by going to AnnualCreditReport.com and following the instructions to get copies of each credit report.

» MORE: How to check your credit score

Step 2: Ask for proof of collection activity

If the collections information on your credit report doesn’t look right, you can contact your creditor for more information. You can request a validation letter from your creditor with detailed information on the debt they are attempting to collect. If they cannot provide this information, you can dispute the report.

Step 3: Request the collection be removed

Before filing a dispute, if your credit reported inaccurate information to the credit bureaus, you can ask them to remove the collections report. They are not obligated to do this, but if they do it can be a quicker resolution to getting collections removed from your credit report.

Step 4: Dispute report with major credit bureaus

If your creditor does not willingly remove the inaccurate collections report — according to Section 609 of the Fair Credit Reporting Act (FCRA) — you can dispute the accuracy of reports on your credit history. You can submit a “609 dispute letter” to all three major credit bureaus to review any report on your credit profile that you believe to be inaccurate.

If your creditor couldn’t furnish evidence of the collections activity or proof that it belongs to you, submitting a 609 dispute letter can prompt the credit bureaus to investigate the report. If they cannot verify the report, it may be removed from your credit report. This may take some time.

Pro tip

The Consumer Financial Protection Bureau offers sample dispute letters you can use to help you dispute a false collections report.

» MORE: How to dispute discrepancies on your credit reports

Negotiate with creditors

As with any debt, communication is key — and you may be able to work directly with your creditors to get the collections report removed from your credit history. Here are a few ways to negotiate with your creditor to help get a collections report removed.

Write a letter

If you are no longer in collections and have paid off your debts, unfortunately, the collections report will still sit on your credit history for up to seven years. But you may be able to expedite this by writing a letter to your creditor and kindly asking them to remove the report.

Most creditors are willing to remove a report if you’ve made good on your debt repayment, but not always. Either way, it doesn’t hurt to try. It could mean a big boost to your score if the creditor decides to remove the collections report completely.

Ask for a “Pay-for-Delete” agreement

If you’re still paying off your debt with a collections agency, they may be open to removing the collections report if you agree to repay the debt in full. You can negotiate a settlement or payment plan with your creditor and ask that the payoff agreement include removing the collections report. This is known as a “pay-for-delete” agreement.

It’s smart to get commitments like this in writing. But even if you have a written agreement in place, there is no guarantee that paying off your collections debt will result in your creditor actually taking steps to remove it from your credit report.

Important note

If you pay less than what you owe on a debt, the forgiven amount may be reported as taxable income to the IRS.

» COMPARE: Best tax software and services

Hire help

If you’re not comfortable negotiating with your creditors directly, you can hire a credit repair agency or work with a credit counselor to help you. These companies can negotiate with your creditors, settle your debts and help you dispute inaccuracies on your credit report to help boost your score.

Understand the impact of collections on your credit score

When one of your debt accounts goes unpaid for 30 days or longer, you are usually considered delinquent. But if you miss several payments and are over 90 days in delinquency, many creditors will send you to a collections agency.

These late payments and collections actions may be reported to the three major credit bureaus (Experian, TransUnion and Equifax) and can have a major impact on your credit score. Since “on-time payments” make up 35% of your credit score — landing in collections can lower your score in a hurry.

Collections typically stay on your credit report for up to 7 years.

Having a loan or other debt sent to collections will stay on your credit score for seven years. This can make it hard to qualify for another loan or credit card while the negative report is still there. Once paid off, your collections report will still stay on your credit report but may have less of an impact over the year until it eventually falls off your report.

Paying off your debts is a worthy goal since it might not boost your score if you still have a collections report on your credit history. There are several credit score algorithms: newer versions ignore paid-off collections but older versions (such as FICO 8) — still used by many creditors — count paid-off collection accounts against your score.

What about medical debt?

A recent ruling by the Consumer Financial Protection Bureau banned medical debt from being reported to credit bureaus and will remove existing medical debts from credit reports.

» MORE: What is medical debt relief?