Collection accounts are considered negative aspects of a credit report. The Fair Isaac Corporation (FICO), the largest credit score compiler, uses your payment record to calculate 35 percent of your score. Collection accounts are a sign of an unreliable payment history. You may be able to remove these negative items and get rid of their impact on your score by reaching an agreement with the collection agency,
Step 1
Negotiate a lump sum repayment amount with the collection agency, advises Melanie Sullivan of the Military Money financial site. The agent will most likely try to get you to pay the full balance at first, but you can often get a reduction. Some agencies work directly with the original lender, while others buy the debt at a steeply discounted price.
Step 2
Tell the agent you want the negative entry removed from your credit report as part of the payment agreement. You have some leverage because the agent is usually eager to get your money. He will usually agree to this condition to ensure repayment of the account.
Step 3
Request a copy of the agreement in writing before you make your agreed-upon payment, Sullivan advises. The agent may pressure you to pay immediately, but you have no assurance she will follow through on removing the account from your credit reports if you only have a verbal agreement. Insist on getting a written document before you hand over any money.
Step 4
Send the money as agreed once you get written documentation of your bargain with the collection agency. The agency doesn't have to follow through with removing the item if you don't pay on time.
Step 5
Order credit report copies through Annualcreditreport.com, the federally-mandated website that gives free annual reports, to make sure the negative item has been erased. Contact the collection agency immediately if it is still there. You can also dispute it directly with the credit bureaus, using your written agreement to prove your position.
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