Saturday, October 18, 2003

How to Get a Note From a Collection Agency for Removal From a Credit Report

A collection on your credit report can negatively impact your borrowing ability. Creditors who see the collection may be less inclined to approve your loan applications. Removing a collection from your credit report requires negotiation with the collection agency and the creditor. Since both parties are interested in getting paid, it is in their best interests to work with you, if possible. They may agree to remove the collection or state it as "Paid" in exchange for you satisfying the balance due.



    Call the collection agency. You can get its phone number from payment demand letters you have likely received in the mail.


    Tell the collection agency you agree to pay the balance, if it removes the collection from your credit report. If the collection agency refuses, you can suggest paying another creditor instead. The collection agency may state it needs to confer with the creditor.


    Ask for "Paid or "Settled." If the creditor and collection agency state they are unable to change the collection in your credit report, ask them to state it as "Paid" only. This is much better than "Paid Charge-off" or "Paid Collection." Another option is to have the creditor list the account as "Settled." While this is less attractive than "Paid," it is not as negative as "Paid Charge-off" or "Paid Collection."


    Get the agreement in writing. If the creditor and collection agency agree to accept payment in exchange for the removal of the collection from your credit report, make sure you get a letter stating this. Inform them you will not pay until you receive this letter.


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