You cannot remove collections from your credit report without paying if the information is accurate, but a collection account will fall off your credit report after 7 years whether you pay the balance or not. If the entry is fraudulent or the account details are incorrect, you can file a dispute with the three major credit bureaus.
How to Dispute a Collection Account on Your Credit Report
- Review all three of your credit reports to locate the collection account.
- Investigate the entry to confirm if it is inaccurate or legitimate.
- Dispute any error online, over the phone, or via mail with documentation to support your claim.
- Wait for the results (usually 30 to 45 days).
If the entry is accurate, and you do not pay off the account, a collection agency can sue you for the balance. After a judge rules in a debt collector’s favor, the company could garnish your wages, freeze your bank accounts, or place a lien against your property in an attempt to collect the debt.
Conversely, paying the collection account balance may improve your credit score as well as allow you to ask your creditor for a goodwill adjustment.
Other Ways to Deal With a Collection Account
Pay the Collection Account: The newest FICO and VantageScore credit scoring models ignore collections with a $0 balance. As a result, paying your collection off can eliminate the adverse effect on your credit score. However, scores from older models are not affected by paid collections, and the entry will remain on your credit report either way.
Ask for a Goodwill Adjustment: If you pay off the collection account, you can also ask the lender for a goodwill adjustment to remove the derogatory mark from your credit report. While creditors do not have to oblige, goodwill requests are successful in some cases.
Medical Debt in Collections
The credit bureaus will automatically remove a paid medical collection account from your credit report following changes to their policies in July 2022. Additionally, starting in the first half of 2023, the bureaus will no longer include medical debt in collections under $500 on credit reports. A medical debt of $500 or more will only be listed on your credit report if it is in collections for one year.
You can check your credit report and get personalized credit-improvement tips for free here at WalletHub.
This answer was first published on 12/09/22. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
FAQs
If you have an excellent credit history, you may be able to get the original creditor or collection agency to remove the derogatory mark as a favor or act of “goodwill.” You'll generally have to pay the collection account off first, though, if you haven't already done so.
Can you remove collections without paying? ›
If you have an excellent credit history, you may be able to get the original creditor or collection agency to remove the derogatory mark as a favor or act of “goodwill.” You'll generally have to pay the collection account off first, though, if you haven't already done so.
How can I remove something from my credit report without paying? ›
How to remove negative items from your credit report yourself
- Get a free copy of your credit report. ...
- File a dispute with the credit reporting agency. ...
- File a dispute directly with the creditor. ...
- Review the claim results. ...
- Hire a credit repair service. ...
- Send a request for “goodwill deletion” ...
- Work with a credit counseling agency.
Send a dispute
The FCRA allows consumers to dispute credit report errors and fraud. So, if you check your credit report and discover a collection account that shouldn't be there, you can send a dispute to Equifax, TransUnion, or Experian and ask them to remove it.
What is the 609 loophole? ›
Specifically, section 609 of the FCRA gives you the authority to request detailed information about items on your credit report. If the credit reporting agencies can't substantiate a claim on your credit report, they must remove it or correct it.
What happens if I never pay a debt in collections? ›
If you don't pay, the collection agency can sue you to try to collect the debt. If successful, the court may grant them the authority to garnish your wages or bank account or place a lien on your property. You can defend yourself in a debt collection lawsuit or file bankruptcy to stop collection actions.
Is it better to pay off collections or let them go? ›
Paying off collections could increase scores from the latest credit scoring models, but if your lender uses an older version, your score might not change. Regardless of whether it will raise your score quickly, paying off collection accounts is usually a good idea.
How do I request a goodwill deletion? ›
How to write a goodwill letter
- List your account number and address.
- Briefly explain the situation that caused the error.
- Explain the steps you took to correct the issue and ensure it wouldn't happen again.
- Mention how it's negatively affecting you, like if it's hindering your ability to qualify for a mortgage.
Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit score may start rising. But if you are otherwise using credit responsibly, your score may rebound to its starting point within three months to six years.
What is the best way to dispute a collection? ›
If you dispute the debt, make a copy of your written dispute and send the original to the debt collector. It's also generally a good idea to send the dispute by certified mail. If you pay for a "return receipt," you'll have proof the debt collector received your mail.
Experian, TransUnion, and Equifax each offers the option to file a dispute online, but if you choose to write a dispute letter, send it via certified mail and attach a return receipt request. The credit bureau must investigate the disputed matter and generally must respond within 30 days.
Do goodwill deletion letters work? ›
Do goodwill letters work? Your lender is not obligated to honor your goodwill adjustment request or help remove negative marks from your credit report. “It's likely they could say yes; it's likely they could say no, and I think there's an equal chance of either response,” McClary said.
How much will my credit score go up if I remove all collections? ›
Your credit score may not increase at all when you pay off collections. However, if your debt is reported using a newer credit scoring model, your score may increase by however many points were impacted by the collections debt. It would also depend on the time passed since getting the negative mark.
What is the 11 word credit loophole? ›
As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
What is a 623 letter? ›
A 623 dispute letter is a written communication submitted to a credit bureau, typically by a consumer, to dispute inaccuracies or discrepancies in their credit report.
What is a legal loophole to remove collections from credit report? ›
A 609 Dispute Letter is often billed as a credit repair secret or legal loophole that forces the credit reporting agencies to remove certain negative information from your credit reports. And if you're willing, you can spend big bucks on templates for these magical dispute letters.
How do I get rid of debt that went to collections? ›
Ask to have your account deleted
If you can afford to pay a large lump sum, you can ask that the collection agency delete the debt from your credit report. If the debt collector doesn't agree, you can request that they mark it as “paid in full.”
How long can you go without paying collections? ›
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.
