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We all get that periodic letter saying that we have missed a payment on a bill and it will be sent to collections. Sometimes, we catch it in time to avoid damaging our credit report. Other times, we do not. This is when millions of consumers panic.

Collection activity has changed over the last few years. It is good to know what you are up against.

15 years ago, if you had a bill sent to collection, there was a really good chance that collection would appear and remain on your credit report for seven years. The frustration for many consumers is to have a bill damage their credit rating five and six years after it has been paid.

How times have changed. Collection companies have been under pressure from the Consumer Financial Protection Bureau to have proof of a past due debt before any derogatory collection is to be reported on a consumer’s credit report. This has changed the reporting activity over the last five years.  Many collections have been pulled from consumer’s credit reports since this directive has been in place.

Additionally, many collection companies will now pull their derogatory marks on a consumer’s credit report after a past due bill has been paid. Many consumers are now seeing collections removed after they have been paid – more so than in years past.

Finally, many collection companies do not keep reporting their derogatory marks on consumers reports after four years after a bill has been paid. As a result of these changes in bill collecting activities, many derogatory marks from a collection company are not remaining on consumer credit reports for the entire seven years.  

It is worth asking any collection company if they will remove a collection from your credit report after they have been paid, especially if they had your incorrect address or phone number, or never gave you proper notice of an impending collection. You don’t need to hire an unreliable and expensive so-called credit repair company. You can ask on your own.

Do this, and you could save yourself the headache of having a bad mark on your credit report for several years.  

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