5 Methods of Dealing With Collections on Your Credit Report
Many people are afraid of collections on their credit report or having any dealings with the collection agency. In actuality, collections are the easiest things to get off your credit report. This is because usually the collection agency has poor documentation, they are not actually authorized or licensed to collect, and they have very little money tied up in the collection. As a result of the shaky status of collection accounts, there are many techniques. We are going to go over in brief the top 5.
- Pay for delete
- Settling the debt
- Debt Validation
- 623 Dispute (Dispute with Original Creditor or Information Furnisher)
- Dispute with credit bureaus.
Pay for delete
This situation is best for small collections ($500 or less), like medical collections or utility bills. You get the collection agency to agree to remove the listing from your credit report in exchange for completely removing the listing from your report. This is a very successful technique. To read up on the expanded version of this technique, read the pay for delete method here. Back to Top
Settling the debt
This technique is much like the pay for delete method, except this method deals with amounts that are sizable (over $1000). This method involves more negotiating with the collections agency to reduce the amount of the debt to an amount that you will be able to pay in one lump sum. Like the pay for delete method, as part of the settlement agreement, you get the collection agency to agree to remove the listing from your credit report. To read up on the expanded version of this technique, read the settling your debts method here. Back to Top
Debt Validation
This method involving leveraging the protections of the Fair Debt Collection Practices Act to force the collection agency to provide documentation that the debt is valid. It's one of the more aggressive techniques against the collection agency. It involves letter writing to the collection agency, but if the collection agency is non responsive, it requires the threat or filing of a lawsuit. To read up on the expanded version of this technique, read the debt validation method here. Back to Top
623 Dispute
This method involving leveraging the protections of section 623 of the Fair Credit Reporting Act which allows consumers to dispute a negative listing directly with the company reporting it on your credit report. The consumer merely requests an investigation of the account, and is required by law to respond within 30 days. In order to use this technique, you must have first disputed the negative information on your credit report with the credit bureaus. This is actually a very effective technique, especially since the collection agencies will not have any documentation to back up their reporting. To read up on the expanded version of this technique, read the disputing listing with original creditor method here. Back to Top
Dispute with credit bureaus
This method is the basic credit repair technique of writing letters to the credit bureaus to request an investigation of a collection on your credit report. It's basic credit repair 101. To read up on the expanded version of this technique, read the credit repair method here. Back to Top
Other articles on collection agencies:
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