If you’ve paid off a debt in collections, then it can be frustrating to see the derogatory mark lingering on your credit report. It’s understandable if you want to erase the account immediately so that it stops hurting your credit score.
If you still want to get the paid collection off your credit report early, there are several approaches you can try that might work. We’ll go over what these are, as well as whether they’re really necessary to improve your credit score.
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2 ways to remove paid collections from your credit report
There are two main approaches for deleting paid collection accounts from your credit report:
- Asking for a goodwill deletion
- Hiring a credit repair company
The good news is that both approaches can work. The bad news is that there’s no guarantees that either will.
In either case, you’ll be trying to bend the rules and get your creditor or debt collectors to stop reporting the collection account to the credit bureaus even though it’s valid.
1. Ask for a goodwill deletion
Requesting a goodwill deletion (or goodwill adjustment) is essentially asking that a legitimate negative mark be erased from your credit report out of kindness. For this approach, you’ll need to send a goodwill deletion letter (or forgiveness letter) to whoever owned your debt at the time that you paid it. This will be either your creditor or a debt collection agency.
This method is more likely to succeed if you still have a relationship with your creditor and they never sold your debt to a debt buyer or debt collector. Additionally, your chances of success are better if you previously had a strong payment history and your reason for not paying your debt is excusable, such as financial hardship due to a layoff or mounting medical bills.
When sending a goodwill letter, make sure to include the following information:
- Details of your debt and exactly which account you want removed from your credit report
- An explanation of your situation and evidence to back up your claims
- A believable plan for how you’ll prevent similar incidents from happening in the future
- Examples of how the negative mark is harming your life (such as making it difficult to take out a mortgage)
- An expression of gratitude
- Your intention to maintain good relations in the future (if you’re sending the letter to your creditor)
2. Hire a credit repair company
If you don’t want to try getting a paid collection removed on your own, then you can always consult a credit repair expert.
Credit repair companies generally can’t do anything for you that you can’t do yourself for free, but they can help with debt collection and spare you the stress of dealing with creditors and debt collectors on your own, and their expertise may help get the job done more efficiently.
When choosing a credit repair company, stay vigilant against scammers. Avoid companies that guarantee that they’ll remove accurate negative items from your credit report. Claims like this are false—it’s impossible for any company to guarantee that they’ll be able to remove any negative marks from your credit report.
Also stay away from companies that charge an upfront fee, which is illegal under the federal Credit Repair Organizations Act (CROA). 1
Will removing paid collections from my credit report help my credit score?
Deleting paid collections from your credit report will sometimes help your credit score—but not always. It depends on which credit scoring model your lender uses when they run your credit.
Newer scoring models, such as FICO 9, VantageScore 3.0, and VantageScore 4.0, don’t penalize paid collections. This means that paying off a collection account will improve your credit score in those models. Moreover, it means that you won’t be able to improve your score any further by taking steps to get the paid collection deleted. 2 3
However, older scoring models, such as FICO 8, continue to penalize you for collections even after you’ve paid them. Since the majority of lenders haven’t updated to the latest models, removing paid collections can still be well worth the effort.
How long will a paid collection account stay on your credit report if you can’t remove it?
Under the Fair Credit Reporting Act (FCRA), collection accounts can stay on your credit report for up to 7 years, starting from the date the debt first became delinquent, regardless of whether they’re paid or unpaid. 4
Thankfully, even in credit scoring models that don’t ignore paid collections, the effects of the negative mark will fade over time, and will become negligible after several years have passed. Your score should recover considerably before the 7-year mark, although it’s impossible to predict exactly when that will happen.
