Once a collection account is determined to be active, a consumer can negotiate the account directly with the collector either for a reduction in the balance, deletion of the bad credit reporting, or both. Certain steps are critical to insure the active collection account is not paid for full balance or for less then the full balance, without first securing the deletion of the account from the credit bureau history, and credit report. Failure to take steps to secure the bad credit deletion may result in extending the reporting period of the bad credit.
We found that with active collection accounts it is unlikely that a consumer dispute of the bad credit item with the credit bureau(s) that have the account in their history will be effective. If the collector is actively collecting and/or reporting the account to one or more credit bureau, then the consumer's dispute will probably result in the account being verified by the collector and alerting the collector that the consumer desires that the account be removed.
Active collection accounts seemed to be best handled when the consumer disputed the collection account directly with the collector: not the credit bureau. There was a high level of success when the consumer followed the collection account guidelines to negotiate to pay even though the collection account is disputed in exchange for the deletion of the bad credit reporting associated with account. We found competent professionals that specialize in negotiating the deletion of past due collection accounts from the credit report. This route will cost money to resolve the past due account and remove the bad credit item. It is imperative that the account be disputed with the collector using the settling collection accounts guidelines.
The consumer MUST dispute the account prior to making any payments. If the collection account is NOT disputed the date of last activity will be updated to the date of the settlement payment. This often times had an immediate adverse effect on the consumer’s credit rating even though the collection account was paid* and, the bad credit history can stay in the credit report for more 7 years.
* NOTE: The impact of the paid collection decreased as the account aged. After 18 months the accounts seemed to have very little impact provided other accounts were kept current.
