How to Pay Off Collection on a Credit Report to Get a Better Score

Collection agencies can be intimidating, but there's no reason to be harried into inaction. Debt collectors buy up debts cheaply from creditors in an attempt to collect as much money as possible from debtors, usually without the expectation of gaining the full amount. In the vast majority of cases, it's possible to settle with a collection agency for far less than the total amount owed. Exercise caution when dealing with collection agencies to resolve the situation quickly.

Instructions

1

Maintain a record of all communications with debt collectors. If debt collectors contact you by phone frequently, politely request that they communicate with you exclusively by U.S. mail or e-mail. Written records are important to enforce any agreements that you might make with debt collection agencies.

2

Request copies of your credit reports from the major consumer credit bureaus (TransUnion, Experian, and Equifax). Make sure that all debts that agencies might be contacting you about are also on one or more of your reports. Cross-reference the contact information attached to the accounts on your credit reports to that provided by collections agencies in their communications with you.

3

Offer a settlement to the relevant collections agencies in writing. Start with an offer between 10-25% of the total amount owed. Keep enough money in your bank accounts to pay the settlement quickly. Most debt collectors will require that you provide the payment within 30 days of their acceptance of your offer, and might rescind it if you delay for too long. Most collectors are also willing to work out a payment plan if you're unable to make the settlement payment in a lump sum.

4

Verify that the collections agencies have removed their accounts from your credit report after you send payment and receive confirmation in the mail. If there are any issues with your report, you can contact the relevant bureaus to induce customer service departments to correct any errors. If necessary, you can provide your written records of your negotiations with debt collectors as evidence for your case.