Delete Collections and Boost Credit Scores with These 4 Proven Tactics

Daniel Rosen  0:00  

Hey, Credit Heroes. There are four proven tactics for removing collection accounts from credit reports. And today I'm going to walk you through each one. So you better stick around. So the big question is this. How can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to credit repair business secrets. If this is your first time listening to my podcast every week, I give credit repair tips and advice on bootstrapping your business from nothing. So be sure to click subscribe and get ready to start changing lives. 

Okay, let's get into this. When a debt goes to collections, the impact can be devastating. They damage your credit score, they make it harder for you to get a loan or a car, and debt collectors start harassing you. But worst of all, collections are one of the most common derogatory items that appear on credit reports. The recession, increased dependency on credit cards, skyrocketing student debt, and the lack of affordable health care are all making life more difficult for more people and forcing them into collections. So if you're in this position, you're not alone, roughly 28% of Americans have at least one debt in collections. And having just one collection can decrease your credit score by as much as 110 points. And that's a lot thankfully, you can delete collections from credit reports. It is a process so today I'm going to share with you four proven tactics that are going to help you to get the job done as fast as possible. Here's how this relates to us. For anyone new to credit repair. A collection refers to a lender attempting to recover payment on a debt that a borrower has failed to pay. When a debt is moved to collections. It usually means that the lender has exhausted all other options for collecting payment, and has now sold the debt to a third-party collection agency to try to recover the money. 

These debt collectors are aggressive, they stretch the truth, and in many cases, they break the law. And if you want to learn how to fight back against shady debt collectors and make money suing them, check out my interview with Vance Dotson it's a good one. Here's the thing to remember collection stays on your credit reports for up to seven years and removing them is a process. And even if the debt is paid off, the problem doesn't go away. Paying off a collection can cause credit scores to increase, decrease or have no impact at all. It all depends on what information changed with the collection account. And the other information on the credit report. Even FICO admits whether or not you pay your collections off is really a personal decision. There are benefits to paying off a debt you can avoid collection lawsuits and interest fees the collection will appear on your credit report as paid in full or settled, which may influence lenders and newer credit scoring models like FICO nine will ignore zero balance collection accounts entirely. But most lenders still use older scoring models like FICO eight that still factor in zero balance collection accounts. Here's why this is important. Just because newer credit scoring models ignore collections with a zero balance doesn't mean that lenders will ignore them. Credit Bureaus will still show these collections on your full credit report. Lenders will see them when they review your full credit history, and you will have to be prepared to explain why they're there. 

So whether you pay the debt off or not, you still want to remove the collection from your credit report because that will make your score go way up. Here's what you need to know. As always, your first step is to dispute any incorrect information on your credit report. But beyond that, there are four proven tactics for removing collections from credit reports tactic number one, sending dispute letters directly to the credit bureaus, requesting verification of the debt, and the removal of any unverified items from the credit report. We call these first letters round one. Regardless of the type of collection the Bureau's required to contact the furnishers that report your information to verify the debt after contacting the furnishers they only have 30 days to respond. If they don't respond in time. Boom, the items you disputed, are deleted automatically. If you don't already have around one dispute letter template. You can download it free right now at credit repair cloud.com/dispute-letter-templates I'll put the link over in the show notes. 

If the Bureau does not respond appropriately or if they respond with a stalling letter. You may need to request a reinvests allegation, demand to know their method of verification, or send them a bureau warning letter. This process does take time. But if you don't get the results you want, you may want to file a complaint with the CFPB. The FTC or your state attorney general, or even bring in an FCRA attorney to take them to court reinvestigation method of verification and warning letters are also free to download at that very same link. Again, it's creditrepaircloud.com/dispute-letter-templates tactic number two, challenge the collection with the original creditor using section 312 of the Fair and Accurate Credit transaction act or send a validation letter to the debt collector directly requesting that they prove that the debt is accurate. This can also go back and forth just like it did with the Bureaus. But again, the key is persistence and pressure. If the original creditor does not delete the item, you can follow up with re-investigations, warnings, or complaints tactic number three, if the debt collector ignores your debt validation request, and more than a month has passed, send them a validation of debt estoppel by silence letter, this letter tells them that by ignoring you and being silent, they must agree to your argument. 

This is backed up by case law and could stand up in court if it ever got that far. If the debt collector does not delete the item, you could do the same process of demanding reinvestigation sending warnings filing complaints, or partnering with an FDCPA attorney to file a suit against the collector. At this point. If you've completely exhausted your options with the Bureau's original creditor and the debt collection agency, it may be time to bite the bullet and negotiate a payment arrangement directly with the debt collector tactic number four, offer the lender or collection agency a paper delete or a settlement. In this situation, you'll offer either a full or partial settlement in return for the deletion of the negative items. Most debt collectors will do this, but most will want the full payment. Here's the thing to remember, removing the collection account from your credit report will raise your score a lot, but it doesn't actually remove the debt itself. You still owe that debt and that debt collector can still take you to court and sue you. But remember, they've usually bought the debt for much less than you owe, so you can usually negotiate with them. Now it's important to be very careful when settling an old debt. If you have a collection account and it's scheduled to fall off your credit report soon and you negotiate a settlement. It will restart the status date and stay for an additional seven years showing as a paid collection which can do more harm than good. That's why it really helps to try for a paper delete where you're paying them to remove the item just make sure you always get proof of the agreement in writing before moving forward. 

Legal disclaimer the information in this podcast was for educational and informational purposes only it does not constitute legal advice. Nor does it substitute for legal advice. a person seeking legal advice should consult with legal counsel familiar with their particular situation. As consumer credit laws vary by state. Here's my final point. Dealing with collection accounts can be financially and emotionally draining, especially when debt collectors are involved. Remember, always be persistent, apply pressure, follow the proven tactics, and don't give up just a reminder, this podcast is brought to you by credit hero score. Credit hero score is the only credit monitoring service that integrates directly with the credit repair cloud get instant access to your credit reports and scores by signing up for a seven-day trial for only $1 Sign up right now at creditheroscore.com. 

And now for my favorite part of the episode every week I feature one of our credit heroes inside our credit repair cloud Facebook community so that you can see firsthand what real people are doing as they run and grow their businesses. And today's spotlight is on Rami Mahmud Rami posted some monster results and a net sales chart that went off the screen. He thanked our team and everyone in the crfc community and shared his story. He said I started this journey a year ago I didn't know where I would land but I knew I loved it. And I enjoyed doing it as a side hustle. Three months later, Rami was able to quit his nine-to-five job and took his business to the next level. Now he says he's about to hit $20,000 A month passively. And now he says he's headed for an additional 10,000 to $15,000 of passive income every month and he closed with a message to everyone saying it's possible you can do it. Just focus and put in the work. Thanks, Ramy, it's great to hear about your passion for credit repair. Sounds like you're changing a whole lot of lives. Congratulations on your success, and I can't wait to see how far you go. 

And I'll end by saying, if you don't already have a credit repair Cloud account, check it out. It's software that most credit repair businesses in America Ron on, just sign up for a 30-day free trial at creditrepaircloud.com/free trial. And if you'd like to change lives and grow your credit repair business, check out our credit hero challenge. It's a live experience that has helped tonnes of credit heroes to get certified in disputing and gained confidence as they run their businesses on a solid foundation. So they can change a lot of lives and make a great living in the process. We're starting the next challenge very soon. So you want to join before the doors close. Are you gonna have a long wait until the next one? So sign up right now at creditherochallenge.com. And if you're finding value in the things that I share on this podcast, click below to subscribe and follow. Also, give me a five-star review. Give me a thumbs up or share the show and help me to change more lives. If you'd like to read the show notes. They're posted on my blog. If you have a question or a comment, drop it down below because I read each and every one of them. I would love to hear from you. And I'll respond as soon as I can. And if you want to learn more about how to fight back against debt collectors that break the law, check out my interview with Vance Dotson, it's amazing. So take care, credit hero, and keep changing lives. Hey, everybody, it's Daniel again. And really quick, I'd like to invite you to join what I believe is the best thing we have ever created inside the credit repair cloud community. And it is a challenge that we call the credit hero challenge. If you're just planning out your business, or you're just getting started, and you dream of having a successful business of your own. So you can quit your nine-to-five and fire your boss and have financial freedom or so you can add another revenue stream to your existing business. If that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics, and all the things you need to be successful at credit repair. It really is the greatest thing we have ever built, and it will change your life. So I recommend you do it right now. Stop everything pause this audio go online and go to creditherochallenge.com That's creditherochallenge.com and join the next challenge. And there's a challenge that starts in just a few days. So go get started right now at creditherochallenge.com