What's this about asking creditors to have paid debts removed from my credit report??? I'm confused.?

Question

I have been working for a while now & am almost finished with working with creditors & paying off debts. I thought that once you paid off a debt, it was removed from your credit report. Now from reading some Q&A's here on YA, I see where the creditors do NOT have to remove that paid collection from my credit report. What? I was prepared for it to stay on my credit report for 7 years, but had no idea that I had to ask to have it deleted from my credit report. What difference would that make - wouldn't it still be on your credit report for 7 years, OR if they did delete the entry from my credit report (like I thought they would), would you then not have to wait those 7 years to have a clear report? I have been working very hard at getting this all taken care of, and now I find out that you have to actually ask creditors to remove the paid items from your report! This doesn't seem fair to me at all! Can someone please explain to me what happens once you pay off in-collection debts?

Answer 1

There are two types you need to know about if you have bad debts. The Original Creditor(OC) is the one who your credit card(or other account) was through. Once you stop paying them they will "Charge-Off" the account and it will get turned over to an Collection Agency(CA). When the CA gets it they will also add a listing to your report with the balance due, and the OC will list a 0 balance. So now you will have 2 accounts listed.

Now, if you pay off the Collection Account they are under no obligation to remove the account, but they must report the correct balance. If you negociate with them before you make payments they will usually agree to delete the collection account once paid. But if you don't ask before, they have no incentive to do it after the fact. Now, this will not remove the OC Charge-Off, but just the CA Collection. But this looks a lot better than having the CA account remain.

What you can do sometimes is after you have paid it off, if they do not remove it. You need to wait a couple of months. After that send a dispute to the Credit Reporting Agenicies requesting that they validate the debt from the CA. A majority of the time the CA will not verify debts that are paid in full and it will be removed anyways. This is not guaranteed but is likely.

IF you can not get it removed and it is paid, then both the OC and the CA listings will be removed 7 years from the date of your last delinqucency. So if your last missed payment was in 1/2004, but paid off the collection in 7/2007. Your date of last delinquency is the 1/2004 so it will come off of your report after 1/2011. However, as time goes on it has less and less of an effect.

Answer 2

This is the way it works:
You have an account and it goes to collections. After 5 years, you pay the collection. The collection will stay on your report for another 2 years, then fall off.

All negative information stays on your report for 7 years and that's the standard (some things like bankruptcies stay on longer). After you pay your debt, you can write the credit bureau(s) to have the account updated to show that it was "paid" or "settled". It will not be removed.
Don't get discouraged, though. After all of your hard work, reast assured that lenders are much happier to see a settled or paid collection rather than an open one.

Answer 3

1. When you pay, the creditor may tell the credit bureau that you have paid so that the credit bureau changes the report from saying that you have not yet paid at all to saying that you paid late. If they do not, you should ask the creditor; if that does not work, dispute it with the credit bureau and they will ask the creditor. Expect this to take some time.
2. That you paid late stays on your report for 7 years, whether or not you ask to have it removed. The credit bureau should remove this after 7 years, but check anyway; if they do not, ask them to remove it; you should not have to ask the creditor after the 7 year period.

Answer 4

They report it as paid. It is still a negative mark; a paid collection. It would be way too time consuming and difficult to ask each creditor to remove it and maybe up to 1/4 of them actually would. A better option is to send 3 letters; 1 to each credit bureau. The key is to send "properly worded" dispute letters challenging each debt. When they can't verify within 30 days they have to remove it; this is the law. Again, the key is to have the right verbage in your letters. Check out the source website for more info; good luck.

Answer 5

needless to say, ethically, on the grounds that they're your costs you're able to desire to probable pay them off. fortuitously, the series rules have been replaced in 1997 to age the account from the date of collections, and not date of final interest, so making a fee does not exchange the drop-off date and you will effectively pay the money owed without extending the reporting of them. As for advantages, previous peace of suggestions, the money owed for the subsequent 3 hundred and sixty 5 days will tutor paid. Given the age of the money owed (6 years), many lenders will place much less value on them in case you have been cutting-edge on your liabilities on the grounds that then.

Answer 6

even though it has been paid it stays on your report. it will come off your report after 5-7 years. the ones that dont are the ones you can call and have removed,(sometimes the company doesnt pay attention and remove it like they should.) goodluck.