How to remove collections from your credit report

When you fail to pay loans, credit cards, medical bills or other debts you owe in a timely fashion, those financial obligations might come back to haunt you. One day, you might review your credit information or apply for new financing and discover a collection account on your credit report. 

Collection accounts are problematic because they have the ability to damage your credit score. These negative credit items could also cause other issues that might make it difficult for you to qualify for future loans and other types of new credit. 

A collection agency may be able to leave a collection account on your credit report for seven years or longer. Yet sometimes you can take action to remove collections from your credit report early. 

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What is a collection on your credit report?

A collection account is a debt that an original creditor has sold or assigned to a third-party debt collector. This sale or assignment of debt usually takes place when a consumer fails to pay a financial obligation as promised and defaults on their payments. 

There’s no set time limit regarding when a past-due bill becomes a collection account. Yet once your debt becomes 90-120 days past due, there’s a greater risk that the original creditor might declare the debt as a charge-off and sell it to a third-party collection agency.

Note, medical bills are an exception to the rule above. In March 2022, the three major credit bureaus announced they would stop reporting delinquent, unpaid medical debts until they are at least 12 months old. This change took place in July 2022.

How long do collections remain on your credit report?

Most collection accounts can remain on your credit report for seven years or longer. A federal law known as the Fair Credit Reporting Act (FCRA) sets this time limit and all three major credit bureaus — Equifax, TransUnion and Experian — must follow FCRA guidelines. 

Again, there are some exceptions to the rules where medical collections are concerned. Per a new credit bureau policy announced in 2022, paid medical collections no longer appear on consumer credit reports. Furthermore, in the first half of 2023, the credit bureaus will stop reporting medical collections under $500 on consumer credit reports. The Consumer Financial Protection Bureau (CFPB) estimates that approximately two-thirds of medical collections will disappear from consumer credit reports when these new changes go into effect. 

How to get collections off your credit report

When a collection account shows up on your credit report, it may damage your credit score. This is true whether the balance of the collection account is $100, $1,000, or $10,000. The occurrence of negative payment history matters more from a credit scoring perspective than the balance of the collection account. 

Because a collection account has the potential to hurt your credit score, it makes sense that you might want to remove them from your credit report. In some cases, you might be able to get those negative accounts off your credit report. 

Below are three strategies you can try to get collections off your credit report early.

1. Send a dispute

One possible way to get a collection account off your credit report is to dispute the account. 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. 

Note: You can get a free copy of your three credit reports at AnnualCreditReport.com. The Federal Trade Commission also provides a sample letter you can use to dispute inaccurate information on your credit report. 

Thanks to the FCRA, you can also dispute collections (or other credit items) that contain errors like incorrect balances, wrong dates and other types of invalid data. If a creditor can’t prove that an item you dispute is accurate or if it fails to respond within 30 days (sometimes 45 days), the credit bureau in charge of processing the investigation must delete the information or update your credit report. 

2. Negotiate a pay-for-delete agreement

As mentioned, the credit bureaus implemented a new policy in 2022 to stop reporting paid medical collections on consumer credit reports. Other types of collections—paid or unpaid—may still remain on your credit reports for up to seven years. 

In some cases, you might be able to convince a collection agency to request the deletion of an account in exchange for payment. This strategy is known as payment for deletion. If you attempt this type of negotiation, get any arrangements you make with a collection agency in writing before you pay. A written agreement is the best way to protect yourself if anything goes wrong after the fact. 

You should also be aware that collection agencies may sign agreements with credit bureaus stating that they won’t delete valid tradelines from credit reports in exchange for payment. Therefore, negotiating a pay-for-delete agreement can be difficult and sometimes impossible depending on the collection agency.

3. Ask for a goodwill deletion

A third potential way to remove a collection from your credit report is to ask for a favor. You may be able to ask the collection agency, the original creditor or both to request the credit bureaus delete the delinquency from your credit reports as a courtesy. 

Of course, even a goodwill deletion will only remove the collection account from your credit report. It won’t erase the late payment history, charge-off notations or other derogatory information associated with the original account. 

This approach is also a long shot at best. You typically have the best chances of success if there were extenuating circumstances that lead to the default (e.g., illness, job loss, a death in the family, etc.) and you have since been able to repay the debt in question. 

Do collections impact your credit score?

Collection accounts have the potential to impact your credit score in a negative way. Yet the exact impact collections may have on your credit score will depend on numerous factors. 

• The age of the account: Newer collection accounts tend to have a more meaningful impact on your credit score than older accounts. 
• The type of collection account: Many credit scoring models treat medical collections in a different way than they treat non-medical collections. VantageScore 3.0 and 4.0 models no longer consider medical collections in the calculation of credit scores as of January 2023. FICO® Score 9 and newer models differentiate between medical and non-medical collections as well. 
• The balance of the account: In some cases, a paid collection could still hurt your credit score. But some credit scoring models ignore paid and low-balance collections. FICO® Score 8 and newer versions, for example, ignore all third-party collections with balances less than $100. 

Will my credit score go up if I remove a collection account?

Removing a collection account from your credit report might have a positive impact on your credit score. Yet the overall impact depends on the rest of your credit report. 

If a collection account is the only negative item on your credit report, removing it would restore your credit to an otherwise clean state. In this scenario, you might see a meaningful credit score increase from the removal of a collection account. 

Now let’s consider a scenario where a consumer sees one collection item deleted from their credit report but five other collections remain. In this situation the impact of the single negative removal probably wouldn’t be as noticeable. 

Credit scoring considers your overall risk. Nothing happens in a vacuum. 

Frequently asked questions (FAQs)