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?

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Bill's Answer: Answered by Daniel Cohen

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

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Comments (139)


Derck R.
Los Angeles, CA  |  April 08, 2014
According to my credit report, I have five derogatory accounts. Two of the five are the same (Collection / Charge-Off) but are now marked “Paid”. Two are both school loans that were (Collection / Charge-Off) but are now marked “Paid as well. The last account was a credit card that shows the condition is “Derogatory” and was charged off to anything company. Since then I was able to pay off that debit in full and I am not waiting for the report to update that information. My question is, what can be done (if any) that will help my report not look like I really have "5 derogatory accounts”? I mean in reality 4 of the 5 accounts have been taken care of and getting the reporting companies to update the accounts correctly can be a task of its own. Do you have any information that will would help me prove that I’ve taken action on the accounts so when my credit is pulled I don’t look so negative?
Bills.com
April 08, 2014
I believe what you're describing is the chain of ownership for one or both of your two collection accounts. What you describe is normal, and not really that horrifying to a loan underwriter who may review your credit report in the future. The underwriter will look to see if and how the collection accounts were resolved, not how many collection agents passed your account around before one bothered to collect it.

What to do? Focus on creating a positive credit history.
Kristen S.
Morehead City, NC  |  April 02, 2014
I paid a credit card account in full 2 months ago. I checked my online account a few days after the payment, and the account balance showed $0. Last week i received an email that my account was delinquent. I called the credit card company and they told me the delinquent amount was some residual interest, and credited the amount back making my balance $0 again. How can they tell me my balance is $0 and I don't find out until later there was interest on my account? I realize the delinquency did occur, however after I saw a $0 balance on my online account I was under the impression everything was paid. I opted out of paper statements, so I never saw anything telling me anything was due until it was 60 days past due. It is not reported to the credit bureaus as delinquent. Is there anythin I can do to correct my credit report?
Bills.com
April 04, 2014
Your best, but my no means good solution is to talk to the credit card issuer to ask if it will adjust the date of delinquency on your account to make it appear the payment arrived on time.
O.J. C.
Wilton Manors, FL  |  March 27, 2014
I just pulled my free annual credit report and discovered that I have been delinquent on my student loans. I attempted contacting the credit reporter but they said they couldn't do anything. I had a score of 735 which dropped now to a 603. I have been working so hard to maintain a good score to see that I let my student loans fall by the waist-side. How do I rebuild my credit FAST? I'm interested in purchasing a home at the end of the year.
Bills.com
March 27, 2014
Unfortunately, there are no quick fixes, when the derogatory information is accurate. The good news is that even with a 603 score there are loan programs that will allow you to qualify for a mortgage.

It is a good idea to contact your lender. You don't want any loans/accounts in collections when you apply for a loan. If you were not even aware that the account existed, speak with your creditor about when you first became aware of the debt, whether you were receiving proper billing notices, and if it is possible to adjust the date of first delinquency.
Spiffy S.
Auburn Hills, MI  |  March 13, 2014
I have five year old hospital bills that went into collections. There are nine total accounts with all of them totaling to $1720. I am finally in a financial position that I could pay them in full, but I'm not sure if it would benefit me in any way to do so. Is there any benefit to zeroing out derogatory remarks? Would it improve my credit score at all to zero out these accounts?
Bills.com
March 13, 2014
Different issue are in play, regarding your responsibility for the debts and the effects on your credit score. If the debts have passed the statute of limitations for debt, then you could avoid paying the debt, even if you were sued. You would need to go to court and use the SOL as a defense.

If the SOL has not passed, then an advantage to paying the debt is to protect yourself from collections which could lead to a judgment against you.< br/>
There could be benefit in paying a collection account, if you were applying for a loan and a lender required you to do so. I am not sure that you would be required to do so, given the age of the debts.

Your credit score took the hit when the collection accounts were reported. Paying them now is not going to boost your score.
Greg S.
Charleston, SC  |  March 02, 2014
Can a creditor legally report a delinquency to credit bureaus after you have paid them in full? I recently was made aware of a past due balance on a new account. Immediately I contacted them via phone and paid in full. Four days later, they reported the delinquency to a credit bureau.
Bills.com
March 10, 2014
The short answer to your question is, "Yes, a creditor is within its rights to report a delinquency, even if it's paid, to the consumer credit reporting agencies." Why? Because the delinquency occurred. Paying a debt does not un-ring that bell.

The long answer is more complicated. You can ask the creditor to lie. As part of your payment negotiations, it is common for consumers to negotiate a deal where, in exchange for payment in full, the creditor agrees to adjust the payment-due date, so the credit reports show an on-time payment.
SD H.
Copperas Cove, TX  |  February 24, 2014
Due to several circumstances, I ended up going to a check cashing loan company (yes, I fell into the trap). Because I retired from a full time job soon after, I chose between paying household bills and credit accounts, falling behind in the latter. The check cash place took HALF the payment one month via ACH, causing me to fall behind in my mortgage. I blocked the ACH and went to work trying make arrangements for mortgage and the credit accounts. In the meantime, my account was sent to the check cashing place main office. Once I was able to make the remaining payment, I went to the check cashing place, but was told they couldn't take my payment (IN CASH) for the remaining amount and to contact their main office, who told me I had to pay the WHOLE amount owed when I went delinquent. Is this legal? I mean, even for Texas? All but one of the other companies I went delinquent with either got me in a reclaiming(?) process or took (and are still taking) my payments. So I am now considered current on those accounts. Should I try contacting the check cashing company and allow myself to get stuck paying twice as much I owe (NOT including "fees")? I have printed off, and can still access the statement showing the ACH for half the amount.
Bills.com
February 24, 2014
File a complaint with the Texas state attorney general's office regarding the lender not accepting your cash payment on the loan. Share your loan information with the AG's office, and ask if the loan conforms to the state's usury law.
Kenan E.
Cary, NC  |  February 18, 2014
I was in a debt management program through a third party company (American Debt Counseling of Sunrise, Florida). I paid the company monthly through an ACH transfer and they in turn distributed to the card companies. Everything was going well for over a year until the company started occasionally making late payments. I was unaware of this until multiple consecutive months were missed and the card company contacted me directly. At that point I was able to make the payments and over the next several months pay the remaining balances. However, the debt management company (ADC) had accumulated several 30 day late, one 60 days late and one 90 days late. Is there any way to dispute these late payment records since I was paying but the money was not being distributed as the contract stated with the debt management company? All of my debts are now paid off, so I have a debt balance of zero.
Bills.com
February 19, 2014
I think that you will not be able to get the credit reports to show that the payments were made on time. That would require your creditors reporting that information to the credit bureaus. This seems unlikely to happen, when the creditors did not receive a timely payment. I suppose it can't hurt to speak to the creditors and see what they say. You may also want to speak with the Office of the Attorney General in your state, regarding the negligence of the American Debt Counseling (ADC). Speak with an attorney, as well, to see if you have any grounds for action against ADC for any harm you suffered (late fees and harm to your credit score).
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Kenan E.
Cary, NC  |  February 19, 2014
Thanks for your advice. Since I was in a debt management program (DMP), there were no late fees accessed, however, my credit score seems to have been greatly effected due to multiple missed payments that piled up. I'll try the State Attorney General's office and see where that leads me. The third party company was in a different state, but maybe there is some hope of punishment/repayment there. Thanks again.
Te W.
College Park, GA  |  February 17, 2014
I have an account that was paid in settlement last report date was in 2013. The first day of delinquency is April 2008, my report says it will go to positive status in 2018 is that correct?
Bills.com
February 18, 2014
The account never goes into a "positive status." However, the account should fall of your credit report 7 years after the date of first delinquency, 2015, from what you wrote, not in 2018. File a dispute with the credit bureaus if it remains on your report after 7 years.
Zc C.
Birmingham, AL  |  January 30, 2014
I enrolled with a debt management company and I have been faithfully paying off my debt since 2012 as agreed in the program. I recently pulled my credit and I noticed that 2 of this company have been reporting my account as derogatory even though I have been paying every month as agreed through the debt management company. The collection company says that they either report account open and closed and paid in full. It seems like making payments as the same effect on my credit as if I had not pay anything at all.
Bills.com
February 07, 2014
It's unclear what you mean by a "debt management company."

If you are working with a credit counselor on a debt management plan (DMP), accounts are usually not reported as delinquent each month, once the DMP is in place. Find out from your DMP provider what is going on, when they made payments, and whether delinquencies should appear, in their view.

If you are working with a debt settlement company, then your enrolled accounts will show as delinquent and unpaid up until they are settled. Your credit score will be harmed until your accounts are settled, and then will recover gradually, if you take the right steps to rebuild your credit.
Erica P.
Chico, CA  |  November 13, 2013
I opened a credit card with Gap and paid every month on time. My card ended up getting stolen and purchases were made. I contacted Gap and let them know what happened, and they put a hold on my account where I couldn't even sign in online to make payments. They ended up contacting me with my current balance after the investigation, and I had already left overseas to study abroad. My account went to a zero balance since I had a family member pay it for me, but I later found out that it also went delinquent. I don't have any other credit cards and had really good credit before this. I applied for a credit card over the summer and got declined. Could this one account hurt my credit score that bad since it was only one account and haven't opened any since? Also, I would like to get this delinquency removed and back to a good credit standing since I am a student and would like have good credit after I graduate. What can I do next? Should I contact the credit bureaus? Is it even possible to get the one delinquent account removed?
Bills.com
November 14, 2013
Credit scores are the result of two things:
  1. Your positive activities, such as making payments on time and keeping your credit utilization low.
  2. Your negative activities, such as missing payments and maxing-out your credit cards.

If you have no activities on your accounts for a long period of time — 10 years or so — it is possible for you to have no credit score at all.

Under the Fair Credit Reporting Act when a consumer is denied credit, the creditor must provide the consumer with the name of the consumer credit reporting agency (CRA) — Equifax, Experian or TransUnion — that provided the credit report, and give the consumer the credit score it received. You also have a right to see a no-cost copy of your credit report from the CRA that provided the information.

Contact the lender you applied to, and review your credit report, searching for errors that may be harming your score. File a dispute if you find any errors.

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