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How To Remove Paid Collections From Your Credit Report

Collections remain visible on your credit report even after paying. Here’s how you can deal with it.

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Updated January 10, 2022

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

You did it. You’ve managed to wrangle the debt collector snakes by throwing your hard-earned cash at them. 🙌

Paying off a collection is a big move because making good on a debt you owe is a huge relief for your financial future. Plus, the break from all of the phone calls and letters is good for your psyche—a wave of credit collections is sweeping across the US, and you don’t want to be caught in it.

To be frank, almost everything about ridding yourself of a collection is great. But notice how we said “almost everything?”

The not-so-great part is the fact that the impact of a collection on your credit report doesn’t just go away once you pay it. In most cases, a collection remains on your credit report even after you cough up the cash. And honestly, seeing this mark every time you check your credit report is just a sad reminder of your struggles.

But what if we told you it’s possible to get a paid collection removed? Here’s what you need to know.

What you’ll learn
  • How Collections Affect Your Credit
  • Paying a Collection
  • Obtain and Study Your Credit Report
  • Request a Goodwill Deletion
  • Dispute Inaccuracies
  • Collection Change of Ownership
  • Pay for Delete Letter
  • Last Resort

How Debt Collections Impact Credit 📉

First, let’s hit the high points. What exactly is a collection? A debt collection is a type of account that opens when a creditor forwards a debt to a third-party collections agency. The forwarding of the debt usually happens once you become seriously delinquent on a debt (60 – 180 days.) 

In this sense, collection agencies work as experts when it comes to collecting an overdue debt. When the original creditor isn’t making as much progress as they’d like, they task debt collectors with picking up their slack. And when collection agencies step in, you now have what is widely known as a “collection account.”

Collection accounts do unfavorable things to your credit rating. These pesky accounts can drop your credit score by 50 – 100+ points, depending on your credit tier. This is of course in addition to the impact from late payments that led you to the collection. You will see a major impact considering late payments account for 35% of your credit score. 😬

Collections are also a “derogatory mark.” Derogatory marks are a fancy term for negative information on your credit report.  Additionally, collections are also their own account, separate from the original debt.

What Happens When You Pay a Collection? 💸

When you pay a collection account in full, the collection remark typically isn’t deleted by the collection agency. Upon payment, the collection is marked as a “paid collection” and shows reported with a zero balance. Your credit may also improve at this point, but only slightly.

However, the remark lives on until the original expiration date. The magic number for the lifespan of a lot of credit factors is seven years. And you guessed it—collections are amongst the factors that linger for seven years on your credit report. What a bummer.

So, the only way you can get the collection removed from your credit report outside of waiting is to convince the collection agency itself. 

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Obtain and Study Your Credit Reports 🔍

The very first thing you’ll want to do on your collection removal journey is to obtain copies of all your credit reports. This is important as sometimes reports can vary between the three different credit bureaus. Obtaining your credit reports allow you to study each report for inaccuracies or misreporting. 

Upon study, you will also gain a better understanding of your credit score and how it works. You can get a credit report for free from all three bureaus. Usually, credit bureaus only give you one free report annually, but they are giving them out weekly now to ease some of the economic uncertainty in the COVID-19 era. 

Request a Goodwill Deletion ✔️

Now that you are a pro at deciphering your credit report, it’s time to attempt to get your paid collection removed. Perhaps the most successful strategy is the sending of a goodwill deletion letter.

A goodwill deletion letter is an old-fashioned technique where you admit your error and request forgiveness for said error. The letter entails explaining your entire collection situation. 

It details why you were late on the debt and why the account ended up in collections, to begin with. Everyone makes mistakes and this letter drives that point home. 

If you have an extensive history of missed payments or negative credit factors, you are less likely to be successful with this approach. But, if you have an otherwise decent credit track record the odds will be much more in your favor.

It’s also important to note that a goodwill deletion letter isn’t advertised as an official tactic by the Federal Trade Commission. As with other credit report factors, this means a goodwill deletion is a hit-or-miss type situation. But it never hurts to try! 🤷‍♂️

What to Include in a Goodwill Deletion Letter 📝

The first rule of thumb: be honest but careful.

Specifically, be careful with what you reveal in your letter. It’s unlikely the agency will sympathize with you if your situation includes money mismanagement or mixed priorities. Do not blame your collections account on a money shortage due to a vacation or overspending on a luxury item.

Young millennial woman sitting at a desk in her house and writing a goodwill deletion letter.
Honesty is very important with pay for delete letters.

Stick to a legitimate reason—for example, a major financial hardship like a job loss or a divorce. Good reasons also include medical issues for you or a loved one, or if you have moved and didn’t receive the notice or bill.

If you don’t have any of these extenuating circumstances and your mistake was a result of you being human, be honest. You admitting your errors is going to work better than lying or exaggerating a problem—and it would really suck for something to come back and haunt you later down the line.

Guidelines For a Goodwill Deletion Letter ✉️

When you get ready to draft a goodwill deletion letter, you’ll want to send it via regular mail or in an email to the collection agency’s customer support. Also, if you’re sending a physical letter, make sure you get a return receipt so you know the letter went through.

Here are a few guidelines and things to include in your written letter:

  • Write like you are a human who makes human mistakes. Be the perfect mix of personable but also professional. 
  • Be polite, sincere, and choose your words carefully. 
  • It’s super important to include your name, account number, personal address, and any other important account details. 
  • Always thoroughly explain your situation and why your account ended up in collections, to begin with.
  • Remind the agency that you have since paid in full. Bonus points for you if you paid or settled the debt timely. 
  • If you’ve paid off the debt, provide evidence. Sending paid bills, receipts, and other supporting documents with the letter is a must.
  • Include how the collection is negatively affecting your credit report and financial goals. For example, if you are trying to apply for a mortgage but the collection mark is stunting this, tell them that. 
  • Closeout your letter by apologizing and by insisting the collection was a one time mistake. Officially ask for a “goodwill adjustment.”

It’s also possible to ask for a goodwill adjustment via phone call. But, you are one brave soul if you can work up the courage to hit all the high points in a phone conversation. Sending a letter or email allows for written documentation as well as gives you a better opportunity to sort your thoughts. 💭

After you send your letter, keep your fingers crossed. While goodwill deletions aren’t a foolproof method and are in no way guaranteed to work, it’s worth the shot. You never know until you try.

Dispute Inaccurate Entries or Errors ❌

It’s entirely possible to have a collections account on your report that does not belong there. Maybe the account is older than seven years or maybe the collection isn’t even yours. If this is the case for either situation, dispute the collection account ASAP.

All past-due accounts should fall off your credit report seven years after they first became delinquent. But, the sad reality is this doesn’t always happen. In some instances, collections can hang around past that seven-year mark.

This is a mistake fixable by simply filing a dispute with the credit bureau that reflects the error. Also know you can better plead your case if you can provide documentation that you’ve paid the account. So dig through that drawer of “useless” papers you have and start yourself a proof pile.

Sometimes, a collection can pop up on your record that isn’t even your debt. A clerical error on the reporting company’s behalf, this error can be super frustrating. If you notice an account that is not yours, ask the original company that reported this issue to validate the debt.

If the agency fails to successfully validate the debt, the agency is obligated to erase the mark from your credit report. Make sure to also follow up in 30 days after submitting your validation letter, if you’ve yet to hear anything.

Submit a Dispute if the Collection Changes Owners 🤝

Collection agencies are a business and as a business, they often transact with other collection agencies. This means your collection accounts can move from agency to agency.

Therefore, the collection agency that appears on your credit report might not even be the agency that is currently tasked with collecting the debt. If you end up face-to-face with this situation, it’s likely you can get the old collection deleted by submitting a dispute. Submit your dispute to the credit bureaus by asking for verification.

If the collection agency neglects to acknowledge the dispute, the account must come off your report. Moreover, any and all accounts on your credit report must be verified—the law says so. The collection agency failing to do so means you get to say bye-bye to the collection account.

Send a Pay for Delete Letter For Unpaid Collections 📩

You can also get a collection account removed from your credit report during the initial payment negotiations. If the collection is unpaid, a popular tactic for removing it from your credit report is to send a “pay for delete” letter. 

A pay for delete letter is a proposal or an offering to the collections agency. In this proposal, you state that you will cough up immediate payment of the debt in exchange for the removal of the collection from your credit report. While this method, like any other method, has no guarantee of success, it’s worth a shot. 

Young millennial male sitting at desk in home office and writing a pay for delete letter to increase his credit score.
Pay for delete letters involve immediate payment in exchange for removing the collection.

With this tactic, you have some leverage over the collection agency as you are offering to give them what they want—payment—so view this letter as a business deal. You have nothing to lose by trying it out as the worst thing they could say is “no.”

Last Resort: Pay and Wait 🕖

While it may not be the ideal outcome, it is sometimes your only option to just suck it up, pay the debt, and play the waiting game.

It’s always best to pay the debt as a paid collection. And while it’s a clip to your wings when trying to apply for future credit, a paid collection at least shows lenders you made good on your debt. It shows that you made a mistake but that you also took the liberty to make it right.

In the meantime, there are other things you can do to rebuild your credit while waiting out the seven years. It’s also important to remember that as time goes on, the impact of the collection lessens. A more recently paid collection is going to sting a bit more than an account that is five years paid.

Remember to monitor your credit report often to ensure the debt falls off when it’s supposed to. But most of all, hang in there—we’ve said it before, time heals all credit-related wounds.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.