Credit Report Self Help Repair

Unfortunately, collection accounts on your credit reports can haunt you long after you've resolved your collection account.

Two Myths About Collections On Credit Reports

There are two common myths about collection accounts on credit reports:

1. My credit scores will improve if I pay off collection accounts. This is very unlikely. A collection account is negative, whether it is paid or unpaid. Sometimes you may see a little bump from paying off one of these accounts, but that's not typical.

2. A collection agency must remove a collection account if I pay it off. This is also not true. Collection accounts may be reported for the time period allowed by law, regardless of whether they are paid or not.

In our ebook Debt Collection Answers, we go into detail about what you can do if you have collection accounts on your credit reports.

Here's a brief summary of the credit report self help repair options available to you:

1. Negotiate. Collectors aren’t obligated to remove an account just because you pay it. But if you have a legitimate dispute about the debt, you may want to push hard for this option.

2. Dispute the debt. If an item is inaccurate or incomplete you have the right to dispute it. If the collection agency does not confirm it, it must be dropped. Warning: If you haven’t paid the debt, disputing it could revive the collector’s interest in the debt. Learn how to dispute credit report mistakes.

3. File a lawsuit. If the debt is too old to be reported, or if you have legitimately disputed it, and the collector continues to report it, you may have case for credit damage under the federal Fair Credit Reporting Act. In addition, the collector may have also violated the federal Fair Debt Collection Practices Act as well as state or federal consumer protection laws. A consumer law attorney can help you determine if you have a case against the collection agency.

4. Work with a credit repair organization. There are many valid warnings about credit repair organizations, and there are very good reasons to be cautious. At the same time, some consumers find that they simply don’t have the time or energy to deal with credit report issues. In that case, hiring a professional may be useful.

For more information on this option, listen to this podcast:

Questions About Collections on Credit Reports?

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