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 They are obligated to delete or modify inaccurate, out of date, and erroneous information.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- erroneous, out of date, inaccurate information
- the debt may soon be out of date for reporting on a credit report (7 years)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
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