Removing a Collection Account from Credit Report?

by **culley96** » Mon Oct 31, 2011 12:07 pm

I currently have a closed account with a zero balance from a store creditor that was initially opened in January 2000. After several years of good standing with this creditor, I missed a few payments and the account was transferred to Arrow Financial Services (a collection agency) in 2009 which was the date it was opened on the 3 credit consumer agencies. After it was reported on my credit report I paid " in full for less than full balance" which was the amount the collection agency initially requested from me. My understanding is that all negative reported accounts remain in your credit report for 7 years. I tried removing the negative account but they mentioned that its 7 years from the last reported date. After a little research I found that in the State of Florida there are several actions that do not give rise to a claim including entering into a new agreement or extending installments due under prior agreements. If indeed this is the Florida law on SOL for credit contracts doesn't this mean that the last date reported does not apply to me. In fact the 3 credit agencies should go from the time the creditor issued credit to the debtor. Please advise.

Thank you,

by **dureau** » Mon Oct 31, 2011 12:08 pm

At the time you paid, you should have negotiated that the collection agency delete/withdraw its report entirely in return for your payment. You then dispute the report with the three reporting agencies to make sure, and within 30-60 days, the collection item disappears from your report.

While it takes 7+ years for an item that isn't deleted to age off your report, for practical purposes, the truth of the matter is lenders are not neccessarily going to bust balls for settled collections accounts older than 2 years, or even as little as 2 MONTHS - depending on what your current financial health looks like.

I got a mortgage approval just weeks after a settled a collections account because 1) it was settled, 2) my credit score met the min required, 3) the rest of my financial health was sufficient to satisfy the lender, and 4) the collateral of the house.

And even when it comes to rates, getting a 'good' rate is relative. I got a better rate than people with 100+pt better credit scores who bought a few years ago, or in the future, just because of timing.

Six months later I was getting unsecured personal loan and good credit card offers.

The only things that are true 7 year credit killers are bankruptcies.

by **kienan** » Mon Oct 31, 2011 12:12 pm

It'll remain on there for 7 years, but you can dispute the collection account and hope the company doesn't respond. Assuming you win your case, the derogatory account will be removed and your credit score will bounce back. But this is a bit of a shot in the dark, since you're at fault for the missed payments.

by **condan** » Mon Oct 31, 2011 12:18 pm

Don't mix your state Statute of Limitations (SOL), the timeframe to bring lawsuit, with the Federal law on the reporting period. They are two completely different things.

Derogatory items age off your credit report 7-1/2 years from the date of first deficiency (default) -- not the date the account was opened or the date the collection agency reported it. This is per the FCRA and nothing restarts this clock.

If you defaulted on this account in 2009, it will age off in 2016.

by **claudius** » Mon Oct 31, 2011 12:19 pm

I have the same problem dude, the hospital I was in sent me a bill which I did not pay, they would report it if I did no pay in the e of months, hearing this I paid it immediately but they still reported a collection account on me. I got a letter from them that I paid it, and what I am going to do is go to creditreport.com and report the collection account on me and send them the reciept and hope fully they should take it off.

by **aviya** » Mon Oct 31, 2011 12:22 pm

The SOL in state law applies only to actions in court. It has no effect on credit reports. Credit reports are governed by a completely separate set of federal laws. The 7 years goes from when federal law says that the 7 years starts; it does not go from when the SOL does.

by **devdutta58** » Mon Oct 31, 2011 12:24 pm

The SOL in state law applies only to actions in court. It has no effect on credit reports. Credit reports are governed by a completely separate set of federal laws. The 7 years goes from when federal law says that the 7 years starts; it does not go from when the SOL does.

It's seven years from the original default usually. So if you defaulted in 2009, it's on until 2016 or so. Nice try though.

The state SOL is for how long they have to SUE you. It doesn't affect your report.

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