Depending on how much a credit claims you owe, even a single collections account on your credit reports can do serious damage to your credit score.
Collections for smaller dollar amounts don't make as big of an impact on your credit score, but if you have multiple delinquencies on your credit reports, don't be surprised when your credit isn't as good as you would prefer it to be.
Regardless of whether a collections is reported for $100, $500, $1,000 or more, your credit score would probably be higher if it didn't show up on your credit reports at all. Just about everyone would want to have this damaging credit listing erased, but few realize there is something they can do about it. What they are not aware of is that there are steps you can take in an effort to delete collections accounts from your credit reports. In fact, Lexington Law, a consumer advocacy law firm with 18 years of experience helping over 1/2 million Americans work to improve their credit, reports that their clients had over 250,000 collections removed from their credit reports in 2008.
You have a number of options when it comes to fixing your credit. Under the Fair Credit Reporting Act, you can dispute with the credit bureaus any items in your credit reports you feel may be inaccurate, untimely, misleading, incomplete, ambiguous, unverifiable, biased or unclear (known as "questionable" items). Essentially, you are able to to question any items that you feel give others an unfair impression of your credit worthiness; including collection accounts.
If a credit bureau dispute doesn't result in a removal or if the reported collections account doesn't qualify as a questionable negative item, there are still options available to you. Your creditors and collections agencies have the ability to remove the items they have added to your credit reports whenever they have reason to do so. On occasion, simply as a result of you asking nicely, they will agree to stop reporting a negative item. If this doesn't do the job, there are a number of more confrontational tactics you can employ based on your rights under consumer protection acts such as the Fair Credit Billing Act and the Fair Debt Collection Practices Act.
It may not be easy, but with time, effort, and proper knowledge, you may be able to remove collection accounts from your credit reports. Of course, if you do not have the time or the desire to attempt repairing your own credit, there are a number of reputable credit repair companies who will use their knowledge and experience to assist you in working towards achieving your credit goals.
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Since 1991, Lexington Law's credit repair services have been helping clients legally dispute the questionable negative items in their credit reports. In 2008, Lexington Law's clients saw over 250,000 collections removed from their credit reports (combined removals for all three credit bureaus).
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