How to Clear Collections Off Credit Reports

Having a good credit report is essential to financial mobility. Collections on your credit report can make it hard to get new lines of credit, certain jobs and housing. It is important to be organized and diligent when working to clear collections off credit reports. Setting up a plan and sticking to it will speed up the process and improve your financial situation.

Instructions

How to Clear Collections Off Credit Reports

1

The first thing to do is get a copy of your credit report. You are entitled to one free credit report every year. You can either write a letter to one of the main credit agencies (Equifax, TransUnion or Experion) or obtain it through one of the many Web resources. Remember, the first one is free so if you run across a website that charges, youve gone to the wrong place.

2

Collection accounts that are inaccurate can be disputed. Notify the credit agencies in the form of a letter about any collection accounts you want to dispute. Make sure you keep copies of all correspondence regarding the disputed debt and have proof of contact in the form of receipts.

3

The credit agencies will notify the creditors of the dispute, and they have 30 days to contact you. Failure to make contact within the 30-day period on the creditors part removes any responsibility you have for the debt and the collection account will fall off of your credit report.

4

Creditors would rather have debts paid than pursue payment. A simple call to creditors who have moved your account to collections could help get the account current. Negotiate a payment plan that will pay off the debt and ask them to change the status of your account from collections to paying on time.

5

If you settle an account, make sure that you pay as little as possible. Negotiate a rate that is a good deal instead of trying to pay as much of the debt as possible. You may lose a few points on your FICO score, but the flip side is that a paid-in-full collections account may only affect your score at little, if at all. If you can spend less by settling collections you will have more money to pay off the rest of your debt.