Having a debt in collection on a person’s credit report will almost certainly bring that individual’s credit score down. Regardless of whether the debt is paid or unpaid, a collection account will normally remain on a consumer’s credit report for up to seven years. If that person plans on obtaining financing in the future, this blemish can cause serious problems. However, it is possible to remove a collection account from a person’s credit report by taking the following steps.
Submit a Goodwill Letter
This first option is one that is oftentimes overlooked, but it can be successful in many situations. Consumers should first try to remove the collections account on their credit history by sending the collection agency what is called a “goodwill letter.” Make sure this goes to the collection agency and not the original creditor since, at this point, the debt has already been sold to a third-party collection agency.
In this letter, explain the situation involved. For example, if the collection account has been paid in full and was paid off for a few years but is still lingering on the individual’s credit history, preventing him or her from buying a home, explain this to the collection agency. Be polite but clear in the request in asking that the collection account be removed from the consumer’s credit history, but also make sure to note that this request is being made in goodwill. Keep in mind that collection agencies are only likely to work with someone who has satisfied the debt. If they are still in the process of pursuing collection on the amount owed, they will be less likely to work with the consumer.
Dispute the Debt
The first attempt may not always be successful, but other options are available to consumers who wish to remove collections from their credit reports. The advanced dispute method is one of those options. Consumers should regularly review their credit reports, and this can be done for free on an annual basis through one of the three major credit agencies. After obtaining a copy of the report, the consumer should review every entry carefully to ensure that all data is accurate.
Pay attention to the following pieces of information:
- Balance owed;
- Account number;
- Date account was opened and closed;
- Account status;
- Payment status;
- Credit Limit; and
- High balance.
If any inaccuracies are noted, be sure to include this information in the advanced credit dispute letter. In this letter, the consumer should be firmer in demanding that any inaccuracies be corrected or, in the alternate, that the account be removed completely. If there are several pieces of information incorrect on the account, it may be easier for the collection agency to simply remove the account altogether rather than go through each line item and correct it.
Send a Demand Letter Requesting Validation of the Debt
If neither the goodwill letter nor the advanced dispute letter work, the next step the consumer should take is to demand validation of the debt. Under Section 809 of the Fair Debt Collection Practices Act, all collection agencies are required to provide written validation of debts they are attempting to collect on after a request has been made by the consumer. This request should be made in writing directly to the debt collection agency. One important thing to note is the consumer has 30 days to make this request after initial contact is made by the collection agency. If they are not able to provide this validation, the consumer has the right to request that the debt be removed from his or her credit report.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.