Settling a debt brings an end to the collection efforts on the account but it doesn’t remove it from your credit report. The Federal Trade Commission accounts that the options for removing settlement information from the credit report is very limited. The FTC reports that it is best on your part to forget about the settled debts and pay off the present debt on time. According to the FTC, the settled credit card account will have less impact on your credit score in due course.
Eliminating settled debt from your credit report – 5 Steps to follow
Read on to know about the 5 important steps to eliminate settled debt from your credit report.
1. Get a copy of your credit report – You will have to get a copy of your credit report from the three credit bureaus Experian, Transuinon and Equifax. If you haven’t requested your free annual credit report, you should do it at once. You will be able to get a free copy of each of your credit report.
2. Verify the settled credit card account – You will have to verify the settled credit card account that you want to remove. The account should be listed as “settled” or "settled for less than the full balance” on the credit report. This negative entry will hurt your credit score to a great extent.
3. Speak to the company with whom you settled debt – In case your account is a charged-off account, you will have to get in touch with your original creditor in most cases. If the original company has passed the account to a collection agency, then you’ll have to get in touch with the agency.
4. Ask the company if it will remove the settled debt – You will have to ask the company whether or not it will remove the settled debt from your credit report. Although the company is in no way lawfully compelled to do so, they may agree to your request. You may also inquire about paying for delete if you haven’t settled the debt yet.
5. Dispute some aspect of the account with the agencies – If the company declines to remove the account from your credit report but the report has realistic errors, then you can dispute the account information. In case the credit reporting agency is not able to verify the data, it will remove this account from your credit report.
