A Higher Credit Score

Now you know what collection agencies can do and what they can’t do. You also know how to negotiate with creditors and collection agencies and know whats in your credit file.

Now, its time to negotiate your credit score. Hmm, you say, is there no limit to this negotiation thing. Well, yes there is. But you can negotiate a tremendous difference in your score. Dropping 3 or 4 collection accounts could be the difference between not getting a car loan, and getting a GREAT car loan.

With that in mind, lets raise your FICO score.

Collection agencies have no motivation really to keep their listing on your credit file once they have been paid. Keeping this in mind, you should always request during the negotiation that the collection agency completely remove their listing from your credit report. I’ve found that most agencies are willing to do this. They have done their job and collected the money, so there isn’t any reason not to.

Once the collection agency is paid, you should contact the original creditor and make sure that they update your account. They are actually bound by the law to do this. The caveat to this is whether you intend to dispute the entire listing. If your going to use the process of verification to dispute the debt, then you will have to wait until that process plays out. It may be that the entire listing will be dropped altogether.

Sometimes a collection agency will get the listing with the original creditor changed, but I wouldn’t expect it. While it is true that the collection agency has little influence over the listing applied by the original creditor, the fact is that they want to get paid! That being the case, they are likely to be cooperative in this area.

Debts other than credit cards may not be listed on your report. For instance, doctor’s bills. Since the medical bill doesn’t appear on your report, the collection agencies listing may legally be left in your file. Some may remove it however after they have been paid. You just have to make sure that you negotiate this up front, before you get out your checkbook.

I don’t want it to sound like your going to come out of this with AAA credit. Most likely, you won’t. That may take a few years to regain. What you will find is that some of the people you owe money to may be stubborn. For whatever reason, they just wont delete the negative listing. I personally keep trying by just calling back and talking to as many different people as I can until I get what I want. Its a cheap tactic, but one that sometimes works. If not now, a few weeks or months from now.

If they just won’t remove the negative from your report, you still have options.

Ask them to list the account as simply as “paid”. This is a reasonable counter-offer if they are unwilling to remove the listing. If the account is listed as “paid”, it at least a neutral listing. Make sure that all the negative listings such as “paid charge off”, collection, repossession, or “charge off” are removed. The neutral listing should have no impact, not negative, not positive, on your score.

They can also list the account as just “settled”. This is unfortunately a negative listing, but doesn’t carry the weight of “charge off” or “collection”. If you get the account listed as settled, keep disputing the account. Eventually you may get it deleted, although it wont happen right away.

You may have to accept that they account be listed as a “paid collection” or “charge off”. This is the standard listing for collected accounts. There is no way of getting around it, these listings are damaging. The bright light at the end of the tunnel is that once the account is paid, they collection agency really has no reason to care what your listing is. So it is pretty common for them to delete it at your request. Just keep trying.