How to Negotiate Your Credit Rating With a Collection Agency

Although a collection agency doesn't directly control your credit rating, the agency does control what it puts on your credit report. Becoming an informed consumer is the most important step you can take to improve your credit rating.

Instructions

1

Gather your paperwork. This includes all notices and letters you have received from collection agencies as well as your personal records for all accounts mentioned.

2

Pull your credit reports. You can request one copy of your reports once a year from the three major credit reporting agencies (Equifax, Experian, and TransUnion) online. See Resource section below.

3

Review your credit reports. Pay special attention to negative items, which will include any accounts currently in collections.

4

Learn about your rights as a consumer. Read the FDCPA (Fair Debt Collection Practices Act) and the FCRA (Fair Credit Reporting Act), the two most important legal documents for anyone trying to improve his credit. While you can start with a simple review of the text, the more familiar you are with the FDCPA and the FCRA, the better you will be able to negotiate with collection agencies and credit bureaus. These two acts also outline requirements for the validation and verification discussed in the next two steps.

5

Request validation from the collection agency by sending them a letter by certified mail. Communicate with collection agencies by mail, never by phone. Validation requires the collection agency to give you proof that they may legally collect the debt from you.

6

Send a notice of dispute to each of the three credit agencies. Credit agencies must remove information that has not been verified as accurate from your credit report.

7

Begin negotiating a settlement once you have received validation of the debt. During the negotiations, make sure to stipulate that the collection agency must delete information about the account from your credit reports. You MUST get an agreement IN WRITING that the collection agency will delete information about the collections account.