How to Get Delinquent Accounts Off Credit Reports

What is the fastest way to get a report of collection and late payments off a credit report?

What is the fastest way to get a report of collection and late payments off a credit report?

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  • Understand that accurate information can't be removed from your credit report.
  • Review the procedures for disputing inaccurate information from your credit report.
  • Take the right steps to improve your credit.

There is no reliable way to remove accurate credit information from a credit report. Despite the claims of many organizations offering “credit repair,” derogatory items that accurately represent your payment history will stay on your credit report for 7 years. Why? Let us start by looking at the rules for credit reports.

Federal Credit Report Rules

Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies (CRAs). The specific law is called the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer’s credit report for up to 7½ years.

To determine when an account will be removed by the CRAs (TransUnion, Equifax, and Experian and others), add 7 years to the date of first delinquency. The date of first delinquency is shown in credit reports. Subsequent activity, such as resolving the debt or one debt collector selling the debt to another collector, is irrelevant to the 7-year rule.

Some debts have a reporting period longer than 7 years, including:

  • Tax liens: 10 years if unpaid, or 7 years from the payment date
  • Bankruptcy: 10 years from the date of filing (15 U.S.C. §1681c)
  • Perkins student loans: Until paid in full (20 U.S.C. §1087cc(c)(3))
  • Direct and FFEL loans: 7 years from default or rehabilitation date (20 U.S.C. §1080a(f)(1) and 20 U.S.C. §1087e(a)(1))
  • Judgments: 7 years or the debtor’s state statute of limitations on judgments, whichever is longer

The FCRA 7-year rule is separate from state statutes of limitations for debt issues, which govern how long you are legally responsibly to pay the debt. You can view the statute of limitations for debt for your states, as well as the lifespan of a judgment in your state, at the Bills.com Statute of Limitations Laws by State page.

The start of the 7-year period begins at the date of first delinquency, or if no payments are made, when the first payment was due. Review your credit report carefully to make certain the dates of first delinquency are reported correctly. Unscrupulous collection agents reset the date of first delinquency to stretch out how long a derogatory account appears on consumer’s credit report. This is illegal under the FCRA.

Just because a debt does not appear on a credit report does not mean the statute of limitations for the debt has passed. The opposite is also true: The passing of a state statute of limitations on a debt does not mean the debt may not appear on a credit report. The federal FCRA and state statutes of limitations are separate and independent of each other.

Whether a debt appears on a credit report does not establish legal liability for the debt. The opposite is also true: You may have legal liability for a debt not reported to the credit reporting agencies. Credit reports are not legal records of every debt a person owes.

Quick Tip

Get a no-cost, no obligation analysis of your debt options from a pre-screened debt relief provider.

Clearing Items From Your Credit Report

If you have an account on your credit profile which is reporting as delinquent or in collections, you may not be able to remove the account from your credit report, but you should at least be able to mitigate the negative impact of the derogatory accounts on your credit score.

First, you may want to pay off any delinquent accounts which are appearing on your credit report. You will likely have difficulty clearing up your credit rating if you leave old collection accounts unpaid and unresolved. You do not necessarily need to pay the full balance of the debt; many creditors will accept a settlement of significantly less than the full balance owed on delinquent accounts in order to resolve the debt.

If you contact your creditors, or the collection agencies representing them, you may be able to negotiate settlements for 50% or less of the current balance owed. You may also wish to contact a professional debt negotiation firm for assistance in resolving your delinquent accounts; for more information on the options available to you in resolving these old debts.

I encourage you to visit the Bills.com Debt Help page. Also, if you enter your contact information in the Bills.com Savings Center, we can put you in contact with a pre-screened debt resolution firm which may be able to assist you in paying off your delinquent accounts.

Second, if you have any questionable items on your credit report which you think are reporting inaccurately, disputing the items is the first step in having them removed from your report.

I encourage consumers to carefully review their credit reports from each of the three major credit reporting bureaus (Equifax, Experian, and TransUnion) at least once per year, to make sure that all of the information appearing on the reports is accurate.

Get a free copy of your credit report at AnnualCreditReport.com. Credit reports are notoriously inaccurate. Check your reports carefully, to make sure that your credit report is current and error-free. See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.

Wise AdviceYou don't need to hire a professional credit repair company to dispute inaccurate information. There is nothing they can do for you that you can't do for yourself, for free.

Since it is somewhat unlikely that you will be able to have accurate credit information removed from your credit reports, you may want to focus instead on how you can improve your credit rating going forward. The first step to rebuilding your credit rating is to establish new positive trade lines to counterbalance the negative impact of these old delinquent accounts.

As mentioned above, you also need to carefully review your credit reports on a regular basis to make sure that all information appearing on your reports is accurate and up to date.

You also need to avoid overusing credit, as having too much debt can negatively influence your credit score; a good rule to follow is to carry balances equaling no more than 25% of your total available credit lines.

To learn more about credit, credit reports, and credit scoring, I encourage you to visit the Bills.com Credit Help page.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

112 Comments

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  • DK
    Nov, 2012
    Dave
    In regards to the 7 year rule, once that time frame is met, do delinquencies automatically drop off of the credit reports, or would the consumer have to petition each individual credit reporting agency to have them removed? Thank you in advance for your help...
    1 Votes

    • BA
      Nov, 2012
      Bill
      The delinquent accounts, called derogatories in the credit reporting world, should be removed automatically when the date of first delinquency reaches 7 years. Exceptions to the 7-year rule apply, as the original answer above outlines.
      1 Votes

  • KB
    Sep, 2012
    Kyle
    Sorry, I noticed this thread has been accumulating dust but all answers seem to be very resourceful. I've recently brought my score from a 545 to 599 in under a year by simply opening a credit card and staying on top of it. Horrible interest rate, but beggars cannot be choosers. I have a few delinquent//collections accounts showing.. My question is, would either paying the debt off (settlement of course) or taking on monthly payments remove these accounts from being labeled delinquent on my report? Or would they still be considered negative or an old delinquent account that was settled//paid? The one or more delinquent accounts is obviously what is hurting my score the most
    0 Votes

    • BA
      Sep, 2012
      Bill
      Paying off the old derogatory accounts does not remove their tainted history. What it does is bring the account to $0 balance. This improves your score gradually, as you move forward. Unfortunately, there is no way to know the exact impact of paying them off, as the credit scoring models are proprietary and secret. Your best bet is to keep monitoring your report, to see the impact for yourself and to keep practicing good credit hygiene: pay your bills on time, control credit utilization, have a good mix of accounts, keep old accounts in good standing active, and don't apply for too many new accounts at one time.

      Separate from the impact on your credit, you protect yourself from being sued, when you settle the account, pay it off, or work out a payment plan.
      0 Votes

  • OI
    May, 2012
    Olu
    I was taken to court by a credit card company and i won a judgement to acquit but the credit bureau insist that they wll not remove it from my credit. The judgement reads, "ORDERED, ADJUDGED AND DECREED by the court that all cost are taxed to the Plaintiff: and the Plaintiff should take nothing by this suit". Please do I have the right to ask it to be deleted as a result of the judgement? And if so, what else can i do? Thank you
    0 Votes

    • BA
      May, 2012
      Bill
      Allow me to use a metaphor to present a little background information about your question. Let us say you are charged with a crime. To convict you, the prosecution must prove its case beyond reasonable doubt. If you are standing up, the level of proof must reach from the floor to the top of your head, metaphorically speaking, for a criminal conviction.

      Now let us say you are defendant in a civil case. The level of proof must be the preponderance of evidence. Using my metaphor, the pile of evidence to win a civil case must reach from the floor to your waist.

      Now let's look at the amount of evidence needed to get information into a credit report. The Fair Credit Reporting Act requires creditors to make accurate reports to the credit reporting agencies (Equifax, Experian, TransUnion, and others). Using my human body scale, the level of proof necessary for creditors to make an entry on your credit report would barely reach your ankles.

      In my opinion, you have the right to ask the credit reporting agencies to remove the derogatory from your credit reports because a court decided the creditor could not show by the preponderance of the evidence that you owe the debt. It's a wonderful, accurate, and in my opinion a persuasive argument. However, the FCRA standard for what can appear on credit report is so low, the creditor can, with a straight face, argue that even though it lacked a preponderance of the evidence to win a civil case against you, the derogatory entry is accurate because it says so.

      What can you do? Consult with a lawyer who has civil litigation experience to learn if you have a case of libel against the credit reporting agencies that are publishing the derogatory, and the creditor that made this report.
      0 Votes

    • OI
      May, 2012
      Olu
      Thank you. I was told another thing I can do is try to file a form in court requiring the judge to adjust his judgement so it states categorically that the item be removed from my credit report. I guess that is what you get for trying to represent yourself in court.
      0 Votes

  • LT
    Apr, 2012
    Lisa
    Recently, an adverse account for $160, that I was not aware of, hit my credit report demolishing my stellar credit scores of 800+. Apparently, my insurance paid all but $160 of a claim back in 2010. Despite my giving the urgent care center my currect address, they failed to update my address properly in their system which resulted in my not receiving the mailed invoice from them for the $160.

    So, at some point they turned it over to a collection agency, which again, I received no notifications from. I learned about the adverse account when I recently applied for an apartment and didn't pass the credit check. When I pulled a credit report from TransUnion I was surprised to see the adverse account there. Since this was all caused by the urgent care being negligent in their duties, do I have legal recourse against the urgent care center for the significant damage their negligence has caused me?
    0 Votes

    • BA
      May, 2012
      Bill
      Consult with a lawyer in your state who has experience in litigating credit score and collections issues. I do not want to hazard a guess if you have enough evidence for a cause of action against the original creditor.
      0 Votes

  • FO
    Apr, 2012
    Feras
    I am in process of negotiating all my late accounts. It has been almost 4 months since I made a payment due to personal reasons. Some accounts I cought up with payments but some had to be settled. My credit score is way down now. How long will it take for my score to start climbing up? I made arrangments to most of the cards and brought them up to date. How will a settle account affect my score?
    0 Votes

    • BA
      Apr, 2012
      Bill
      Two reading assignments for you:

      As you will see after reading those two articles, it is difficult to answer your questions without knowing more about your credit history, and the number of tradelines you have open.

      0 Votes

    • LB
      Apr, 2012
      Lindsay
      Feras, I just finished working on my husbands credit. His score a year ago was 555. We have continued to make all payments on time, not actively search for credit. It is now 649. I watched it go up 40 points just be having no more delinquent accounts. As far as making it come up fast, there are a lot of variables. It's not going to do much good if you pay off all your debts but go open up 4 credit cards and 3 loans,ect. My advice is narrow down your credit cards to two. Make sure they have a close to 0 balance, no more than 35% of your limit. Don't apply for credit cards unless you don't have any right now. Don't close out your oldest credit card. Make payments on time. These are the exact same steps I took to bring my husbands score up. Just working on getting him towards a 700 now. Who would have thought at one time he had nearly 13 collections and a 470 credit score? Good luck!
      0 Votes

    • BA
      Apr, 2012
      Bill
      Excellent work, Lindsay.

      Readers, notice Lindsay's use of the word working in the first sentence of her message. It took a year's work to raise her spouse's score from 555 to 649. It's easy to lose 100 points in a day, but credit score recovery is a process and there are no quick fixes.
      0 Votes

    • LB
      Apr, 2012
      Lindsay
      That is a great point. But I wanted to mention, that in some cases you can see a dramatic increase in the score. It has taken 2 years of good online payments which have contributed to the better score. However, just by paying off his last collection, his score went from 608 to 649.
      0 Votes

    • FO
      Apr, 2012
      feras
      That is very encouraging! I am happy to see some people have the same problems with credit as mine. I know it will take me long time to fix it, but good credit score means everything these days. Thank you for your help. My credit score was 630 last Dec. but then went down to 500 range. It is very costly to fix a credit score but I think it will be worth it at the end.
      1 Votes