Shepherd Outsourcing opened its doors in 2021, and has been providing great services to the ARM industry ever since.
About
Address
©2024 by Shepherd Outsourcing.
Dealing with online collections on your credit report can be daunting. Did you know that a collection account can lower your credit score by up to 100 points? This can make securing loans, credit cards, or even renting a home harder.
You're not alone in this. Approximately 35% of American adults with a credit file have debt in collections, with an average debt of $5,178. While the overall number of collection items on consumer credit reports has declined by about one-third in recent years, thanks in part to policy changes, the presence of any collection account can still pose significant challenges.
In this guide, we’ll explain how to remove online collections and their impact on your credit score. By following these steps, you can improve your credit score and unlock better financial opportunities.
To better understand how to remove these collections, let’s first explore what online collections are and how they impact your credit.
Online collections are debts handed over to third-party agencies that manage them through digital means like emails, texts, or online payment platforms. These agencies typically take over after a debt has been unpaid for a specific period, usually 90 days or more.
They collect on behalf of companies such as credit card issuers or healthcare providers. While some online agencies are legitimate, others may use aggressive tactics, making it essential to verify that the debt is valid and ensure you're dealing with a credible agency.
Now that you know what online collections are, let's dive into how they can affect your credit score and financial well-being.
Having online collections on your credit report can severely damage your credit score. Even a single collection account can lower your score by 100 points or more, depending on your current credit profile. This can make qualifying for loans, credit cards, and even housing harder, as many lenders and landlords use your credit score to assess risk.
The longer a collection remains on your report, the worse the effect on your credit score. Typically, a collection account stays on your credit report for seven years, even if the debt is paid. This can result in higher interest rates or loan denials, making it important to act quickly if you find a collection on your report.
To give you an idea of the impact, payment history, which includes collections, is the most influential factor in credit scoring, accounting for 35% of your FICO® Score. Additionally, unpaid collections can remain on your credit report for up to seven years, impacting your creditworthiness during that time.
Understanding the consequences is the first step; now let’s go over the steps you can take to remove these collections from your credit report.
If you're dealing with online collections, there are steps you can take to remove them from your credit report and improve your financial standing. Follow these steps to get started:
The first step is to review your credit report. You can request a free copy of your credit report once a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. You are entitled to one free report from each bureau annually through AnnualCreditReport.com. Regularly checking your credit helps you identify any collection accounts and potential errors that may need to be disputed.
If you find a collection account, verify its legitimacy. Sometimes, debts are mistakenly reported or may be past the statute of limitations for collection. It's important to note that a debt's statute of limitations does not impact your credit report.
A delinquent debt remains on your credit report for seven years, regardless of whether the statute of limitations has expired. You can dispute any incorrect information directly with the credit bureaus or request validation from the collection agency.
Consider negotiating a settlement with the creditor or collection agency if the debt is valid. One approach is to request a "pay-for-delete" agreement, where you agree to pay the debt in full (or a settled amount) in exchange for the removal of the collection from your credit report.
However, it's essential to understand that pay-for-delete agreements are not guaranteed and are often discouraged by major credit bureaus, as they require accurate and complete reporting of all credit information. Despite this, some collection agencies may agree to such arrangements in some instances.
After paying or settling the debt, request that the collection account be removed from your credit report. Even after you pay a collection account, it stays on your credit report for seven years.
However, you can dispute collection accounts that are inaccurate. You may even be able to persuade a collection agency to remove the account once you've paid it.
Additionally, consider writing a goodwill letter to the creditor or collection agency, explaining your situation and requesting the removal of the collection account from your credit report. While not guaranteed, some creditors may honor such requests, especially if you have a history of timely payments..
If removing a collection isn’t possible immediately, other options exist to help manage your debt and improve your credit score. Read ahead.
If you cannot have a collection removed from your credit report, there are still options to help improve your credit. These alternatives can assist in managing your debt and rebuilding your credit over time.
Suggested Read: Understanding How Debt Consolidation Works: Pros and Cons
If you're unsure which option is best for you, Shepherd Outsourcing Services can help you explore these alternatives and choose the most effective solution based on your specific situation.
Navigating online collections alone can be overwhelming. Shepherd Outsourcing Services is here to help. With years of experience in debt management and negotiation, we assist clients in managing their debts and removing online collections from their credit reports.
Our team can negotiate with creditors on your behalf to settle debts at a reduced amount and, in many cases, arrange to remove collection accounts once the debt is paid. We offer personalized debt management plans tailored to your financial situation, helping you regain control over your credit and work toward a healthier financial future.
Don’t face debt collection challenges alone. Shepherd Outsourcing Services can help you through the process and find the best solutions for your unique needs.
Suggested Read: Top Debt Management Services for 2024
Once you've taken the necessary steps to remove collections, it's essential to ensure you avoid facing them again in the future.
Once you’ve removed collections from your credit report, it’s important to take steps to prevent them from reappearing. Here are some simple tips to avoid future online collections:
Taking these steps can keep you on track and prevent collection agencies from appearing in the future.
Removing online collections from your credit report is not an overnight process, but it’s a worthwhile endeavor to improve your financial health. Following the steps outlined in this guide and seeking assistance from Shepherd Outsourcing Services, you can regain control of your credit and open the door to better financial opportunities.
If you have collection accounts on your credit report, don’t wait for them to damage your score further. Take action now to clear them and work toward a debt-free future. Shepherd Outsourcing Services is here to help you every step of the way. Reach out today!
A "pay for delete" agreement is a negotiation with a collection agency where you agree to pay the debt (or a settled amount) in exchange for the collection account being removed from your credit report.
A: The time frame can vary, but once the debt is paid or settled, it can take anywhere from 30 to 60 days for the collection account to be updated or removed from your credit report.
A: Yes, if you were never properly notified about the debt, you can dispute it with the credit bureaus and request proof from the collection agency.
A: If the collection is paid but still showing up on your report, you can dispute it with the credit bureaus and request that it be marked as "paid" or removed entirely.
A: Shepherd Outsourcing Services can negotiate with creditors on your behalf, potentially settling debts for less than what you owe, and help remove collections from your credit report.
A: While you can negotiate with creditors yourself, working with a professional debt settlement service like Shepherd Outsourcing Services can provide expertise, save time, and increase the chances of a successful outcome.
©2024 by Shepherd Outsourcing.