FIVE Ways To Remove Debt Collections Items From Your Credit Report

Debt collections negative items can be a common thing on credit reports. This is not something to be afraid of as they are one of the easiest items to get rid of if you arm yourself with the right information and strike the right cord with the collection agency. Usually, collection agencies are working on their back foot with poor documentation and lack of acutal authority over the debt. As result you can exploit this apparent weakness and get it removed from your credit report.

There are ways in which they can be removed and I'll discuss 5 of them here:

1. Pay For Deletion From Credit Report

This involves getting the collection agency to agree to remove the negative collection item from your credit report once you have settled your debt in full. This usually involves small sums of $400 or less - for instance utility bills. Collection agencies make a huge profit if you do this and are likely to readily agree to your demands.  In return, you receive a cleaner credit report and a boost in your credit score.

An overview of bad debt collections agencies are that, they pay very little to the original creditor - infact pennies - for the debt they are trying to collect depending on the type and age of debt. The older the debt, the cheaper it is - sometimes as little as 1 - 2 cents for each dollar. Now with the original creditor out of the picture, any amount they collect goes directly into their coffers. For example if you owe $500.00 to a credit card company and they may pass this debt to a collection agency for $50. Thus even if you pay them $250.00 they still make $200.00 profit.

With that in mind, write to the debt collections agency and attach a settlement offer proposal reminding them of the fact that, they haven't got proper documentation of your debt and also of the profit they'll be making if they accept your offer. Wait till you receive their written acceptance of your offer before making payment.

Now, watch your credit score improve.

2. Negotiating & Settling Your Debt

This is similar to the above method except that it's usually for larger amounts $1000.00 or more. If you're in this situation, you have to sharpen your negotiating skills. The aim is still to get the debt collections agency to remove the listing from your credit report as part of the settlement agreement. 

3. Excersing Your 623 Dispute Right

This involves using the rights afforded you as a consumer by Section 623 of the Fair Credit Reporting Act by disputing the negative listing with the company reporting it. This is a very effective method as most collections agencies will not have any documentation to prove your debt. But before you use this, you should have disputed it with the credit bureaus already.

4. Validating Your Debt

This an agressive route to deal with the debt collections agency and involves writing letters asking them to prove you are the owner of the said debt. The usual tactics played by most agencies is to ignore your letters as they'll have little or no documentation for backup. In that case, you must be prepared to threaten them with a lawsuit. Using this method, you're protected by the Fair Debt Collection Practices Act which requires that debt collectors treat you fairly and prohibits certain unfair practices.

5. Disputing With Credit Bureaus

This involves disputing the negative debt collections item on your credit report with the credit bureau which has record of it. This can most times, if done effectively, lead to the listing being removed. To learn more visit our Free Credit Repair Tutorial or here for free credit repair overview.