Can someone tell me what's the best way to fix your credit if you were ever sent to collection?

Question

I recently applied for an apartment and they told me they found I was send to collection in the past.

Answer 1

There is nothing you can do to immediately clear that from your credit. You used have to keep paying all your other bills on time for a while to build up your credit score again.

Answer 2

Unfortunately, there isn't a "quick fix" to bring your credit score up. It will take some time. There are ways to manage your credit score, however.

1) Get your credit report. The apartment complex you applied for has to (by law) provide you with the reason they are denying you. They will have a copy of your credit report on file - ask nicely and they may give you a copy. As a consumer, you are entitled to one one free credit report annually from each of the "big three" bureaus. Go to www.freecreditreport.com.

2) Once you have obtained your credit report, look for any outstanding accounts, or unresolved credit lines. The creditor's information will be on the report - contact them directly and resolve any issues. If you have accounts in default or that have gone to collection, the companies are always happy to close accounts, so usually you can "settle" for a lower amount than what you owe, and they will report to the credit agencies that you have corrected the issue.

3) Close accounts that you do not use. Too much open credit can lower your score. Creditors look at your principal to income ratio. If you have too many accounts open, eventually it will be hard for creditors to extend credit to you, because it will look like you have too much open credit, and they will "assume" you can't take on any more credit.

4) Most importantly, make all your payments on time. This is crucial to your credit score. If you ever find yourself unable to make a payment, contact the credit agency BEFORE the payment is due, and explain the situation to them. 9 times out of 10 you will be able to make arrangements so they won't report a late payment, or they will allow you to make a "good faith" payment of a lower amount then what is due, so they know you will pay when you are able to.

Answer 3

I actually heard a way to eliminate a collection agency from your account, which I am going to try.

Send a VOD letter to the collection agency listed on your credit report via proof of delivery. AS SOON AS YOU GET THE PROOF IT WAS DELIVERED, send a VOD letter to the credit agency. The credit reporting agency will attempt to contact the collection agency, and they are required by law not to talk about it since they are not the original creditor (or something like that). The person that told me about this said that in every case he knows of this was tried, the collection agency was erased from credit history. There is definately no harm in trying.

Answer 4

You have to pay what you owe to the collection agency.