A Few Ways Through Which You Can Remove Collections From Your Credit Report
Most of you have faced the agonizing notifications from the debt collection team in case of not making payments for your credit card or a loan. These notifications may range from frequent calls to emails and letters sent to your place. If you have gone through any of this, you would know how painful it can get.
Therefore, the best way to deal with these debt collectors is by having your debt collection account removed. Now before we move on to the ways of doing this, let’s discuss what debt collection really means.
A debt collection account opens up when creditors or bankers hand over your account to them upon not making payments for months. The bank or creditors do this either with the purpose of assigning the debt collection team for the debt recovery or they sell the account to them.
The amount they receive is not equal to the outstanding balance that the borrower owns to them but it is still enough to cover at least some portion of it. Once your account has been sold to the debt collectors, it appears on your credit report and everywhere in your credit history.
The appearance of debt collection on your report can seriously mar your credit score and eventually becomes a hindrance in your future financial dealings.
Your credit report is composed majorly of your past payment history and due amounts. If you fail to pay on time, the payment history appears to be adverse and with collection having on your report, the entire case becomes extremely worst.
This can come in your way of buying a house or car in the future even if you have cleared the collection because it remains on your report for 7 years. So, it is really important that you know how to remove collections from your account.
Dispute
This method is utilized when you find that a certain debt is not yours or there is a major error that has landed you in this debt collection situation. You can dispute it or ask for a debt validation within the first 30 days of you getting notified of being in debt collection.
If the collector fails to provide any evidence regarding your debt, it will be removed from your account or the error would be rectified.
Future Dispute
Many collectors play it foul and try to modify the date of the delinquency such that it remains longer than seven years, which is the time limit for the collection account to appear on your report set by the Fair Credit Reporting Act (FCRA).
You can start a dispute if such a thing happens so that you do not have to suffer for a longer period.
Goodwill Letter
This can be used when you have paid already but just not on time. A goodwill letter is sent to the agency asking for the removal of an account with an explanation of how tough it was for you to pay in the past. If all goes well, you will have your account removed.