Yes and No. Let me explain if debt collectors delete from credit report.
Debt collectors/creditors can do whatever they like with the information they’re reporting. Yes, they have the power to delete or modify items from the credit report. They are obligated to delete or modify inaccurate, out of date, and erroneous information. And in reality, they can delete for any reason and no one will know “why” it was deleted.
However most debt collectors tell a consumer that they can not delete information because it’s against the law or they’re required to report only accurate information. Their interpretation is that deleting for a settlement would create a false representation to credit bureaus because a delinquent debt was paid and it’s no longer reflected on the consumer’s credit report. Lenders will have less than perfect information to rely upon when making a lending decision.
Debt collectors rely upon the following to form their opinions:
- Fair and Accurate Credit Transactions Act (FACT Act) Section 312
- Fair Credit Reporting Act (FCRA) (15 U.S.C. 1681s–2(a)(1))
- It is a violation to pay for a deletion in the contracts the credit reporting agencies (Experian, Equifax, TransUnion, Innovis) ask the debt collector and creditors to sign. If they accept payment for deletion, then they may not have the right to report to the credit bureaus any longer.
I do not want anyone to lose hope in settling for a deletion. Many debt collectors and creditors just want the money and are willing to delete from the credit report to get it. Some have to fight a little harder to achieve the deletion. But most consumers find they get enough creditors to delete from their credit report to achieve the higher credit scores they need.
Reasons for a possible deletion
- no previous notification of the debt before the put it on credit report
- erroneous, out of date, inaccurate information
- the debt may soon be out of date for reporting on a credit report (7 years)
- the debt collector is no longer attempting to collect on the debt
What if a Debt Collector doesn’t agree to delete?
Not all debt collection agencies will agree to delete for a settlement. Consumers will have to choose whether they actually need to settle or not. If a loan program requires them to settle the account, then the settlement will not positively affect the credit score that month. In fact, it could lower the score some. But as time goes on, a zero balance negative item loses the value on the credit score and the score will increase. After 24 months, a zero balance negative item has little affect on the credit score.
For additional, free assistance see – Debt Settlement Sheet
If you have questions concerning this article call us at (214) 506-2500 or email chris@txclf.com
Continue Reading
Today, we’re releasing our third Snapshot of Complaints Received from Servicemembers, Veterans and their Families. The report details the data and trends from consumer complaints we’ve received from members of the military community since July 2011.
Here are just a few highlights:
- Debt collection complaints have continued to rise since our last report, and now make up 39 percent of total complaints. It is our largest category of complaints from the military community.
- Credit reporting remains a top category of concern. 72 percent of these complaints are about incorrect information on credit reports. This remains a significant issue for the military community, one that we highlighted earlier this year.
- Student loans are another concern. 49 percent of these complaints are about problems dealing with a lender or servicer. In these complaints, we continue to see long-standing trends, such as servicemembers complaining about not being provided their Servicemembers Civil Relief Act rights.
This year our report also highlights our outreach efforts that allowed us to connect with thousands of members of the military community, as well as three of our enforcement actions that recovered millions of dollars for affected consumers, primarily servicemembers, veterans, and their families. These figures represent the positive impact of the work we continue to do on behalf of those who serve.
Problems with account services
Basic account servicing stands out as a significant area of concern for servicemembers. Most consumers can call their financial institution, visit a branch, or connect online to try and get the help they need to maintain their account. Unfortunately, for military personnel and their families, the realities of military life, including deployments, frequent moves, and a high operational tempo, can sometimes make access to those services extremely challenging.
We found that servicemembers were often subject to a variety of account maintenance or penalty fees, as well as account-access restrictions, which were triggered due to aspects of their military service.
These problems raise concerns that financial institutions may not have a true understanding of the servicing needs of their military customers and may lack proper procedures and protections for them. Detailed examples of servicemember experiences can be found in Section II of the report.
Check out the snapshot to learn more.
We’re listening
As always, if you have a problem with a consumer financial product that you can’t resolve on your own; or if you know someone in that situation, please remember that you can submit a complaint online or by calling (855) 411-2372. We make your voice heard.
