A collection entry on your credit report, including medical collections, can severely lower your credit score and in many cases prevent you from obtaining a mortgage or auto loan.
Before we get into how to remove collections from your credit report, I want to go into detail about what a collection entry actually means, how badly it can hurt your credit score, and how long collections stay on your credit report if you don’t take any action.
When I was in college I got a cellphone with Sprint. The phone service didn’t work well so I switched to Verizon but forgot that I owed Sprint a payment.
Long story short, it ended up going to Sprint collections and showing up on my credit report. I went ahead and paid the collection because I thought that would also remove it from my credit report.
However, it wasn’t removed, it was just changed to “paid collection”. I followed these steps to get it removed
1. Request a Goodwill Adjustment from the collection agency
The first step is to mail the collection agency a “goodwill letter”.
This is basically a letter that explains your situation, such as you want to purchase a house but can’t because of the collection on your credit report, and you’re kindly asking that they remove the collection out of goodwill.
2. Dispute the Collection Using the Advanced Dispute Method
If the goodwill letter fails to get the debt collection removed from your credit report, the next thing you should try is the advanced dispute method.
For this method, you will need a current copy of your credit report. TransUnion will provide you with all your credit reports –plus they include your credit score for free.
Once you have your credit report, find the entry of the collection you want to be removed and verify every piece of information that is listed.
If you find anything that is inaccurate, note it. This method works because rather than simply disputing the entire entry, you are going to write an advanced dispute letter that lists especially what is inaccurate.
Check the following items on the collection entry for inaccuracies:
- Account number
- Date opened / Date closed (check all dates)
- Account status (e.g., Closed)
- Payment status (e.g., Collection)
- Credit Limit
- High Balance
- Anything else that appears to be inaccurate
After you have noted the inaccuracies you found, use my advanced credit dispute letter templateto write your letter.
Using this letter, you will demand that each piece of information is corrected or that the collection be removed.
This makes it more difficult for the credit agencies to verify the collection and hopefully result in them simply removing the collection altogether.
3. Demand That the Collection Agency Validate the Debt
If you’re unable to find any inaccuracies on the collection entry on your credit report, next you should write the collection agency and demand that they validate the debt.
Under section 809 of The Fair Debt Collection Practices Act, collection agencies are required to validate debts they are attempting to collect if you request that they do so.
The rub here is that you only have 30 days to make the request after their initial contact. If they are unable to validate the debt, you can ask them to remove it from your credit report.