Once I pay these bills, am I going to have to constantly call these creditors and ask them to tell the credit bureaus to remove them from my credit report. Do the creditors have any reason or incentive not to tell the credit bureaus to delete it? I want to raise my credit score. I've heard the only way to do this to pay the bills off and make sure they are removed, not just listed as "paid", but deleted from my report.
Thank you for taking the time to answer.
In short, you can't. Your credit report is allowed to contain true and accurate (albeit negative) information about you. You can try to negotiate a "pay to delete" type of settlement, but most creditors and debt buyers don't do that (it is a violation of their terms and services agreement with the credit reporting agencies. The credit reporting agencies wan their reports to accurately reflect your credit worthiness, so the frown upon and forbid pay to delete). Also, just from a behind the scenes perspective, credit reporting is largely automated. If the account is paid or settled, that filters through the system automatically from payment processing to credit reporting. To delete the account, requires someone to manually go in and re-code the account, all things being equal, the creditor is going to do the thing that takes less work (like everyone).
If you can get one of them to agree to pay to delete, get it in writing. But aside from the creditor agreeing to do it, you have no legal right to have the account deleted from your credit report once it is paid or settled.
You credit will improve regardless. The #1 way to improve credit is to USE credit. Once you resolve these bills, obtain a credit card (most likely a secured card) that reports to the credit agencies, charge no more than 10% of the available balance and pay it off each month. That will do more to raise your score than anything else.
Credit reporting is like your "permanent record" at school. Paying off a debt doesn't remove it from your credit report any more than graduating changes your grade in chemistry. That's just the way the credit reporting process has been set up to work. Hope this perspective helps!
Under the federal Fair Credit Reporting Act, Fair Credit Billing Act, and Fair Debt Collection Practices Act, only those items that are reporting accurately and who have complied 100% with the back-end record-keeping may report on your credit. Auditing them under those laws is specific and can be complicated because they will reject anything that does not adhere to form. Companies like White, Jacobs & Associates specialize in consumer programs that target inaccurate derogatory items on a credit report and hold the bureau's feet to the fire (they are, after all, money-making institutions and that means that the threat of litigation for Damage to Credit Reputation is a real concern). The audits will require the original creditor and entity reporting to provide a detailed billing history tracing the account from zero to its present reporting balance and provide a copy of the original signed contract within 45 days. Without that, the FCRA says that the item must be deleted.
FCRA audits can be tricky and overwhelming, particularly when you consider that everything must be in writing and that the bureaus ultimately do not control what may be re-reported. You'll need to go to the third party and original creditor as well. If you choose to search out a company to handle it for you, make sure you find a reputable credit repair organization that operates nationally, has solid results, and preferably has attorneys attached to it.
I agree with the other answers. Yes, your creditors have a massive incentive to NOT delete. This is an industry-wide incentive to keep credit scores down so they can charge higher interest rates. Moreover, the existence of accounts gives the credit industry a better record of each consumer. However it is important to note that paid accounts can be valuable, assuming they are not derogatory (e.g. late payments). There are other ways to increase your credit score. I suggest you contact a reputable credit repair professional or do some intensive research. There are a lot of tools on line that can assist you.
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