name removed -
Try to stay away from collection agencies at all costs! They are liars and will say or do anything to get you to pay. If you can, negotiate with the original creditor –offer to pay them in FULL (if you can) if they agree to take the bad entry off of your credit report. Get everything in writing and never give out your bank account information. You can read my post on the subject here. Also, here are some sample negotiation letters to get you started.

Hope this helps
Ryan

Are they paid? If not, are you looking to pay them? If they are not paid, do not deal with the collection agency! Contact the original creditor and negotiate payoff. There is no advantage to working with the collection agency. Unless the account was out right sold to the collection agency, it’s most likely that the original creditor is simply using the collection agency to collect the debt. Therefore, they will also still work with you directly.

Ryan

Hi name removed -
Assuming these accounts have an overall good payment history, I would try to remove the late payments on both accounts by sending the original creditor a “goodwill” letter kindly asking them to remove the late payments. Goodwill letters are highly specific to your individual situation, but I suggest taking a look at my sample goodwill letter.

Also, read this article I wrote a few months back on the same subject.

Best,
Ryan

Basically authorizing another person on your credit card will have no affect on either person’s credit score, which was usually the reason people did it in the first place –in another words, by authorizing a person with bad credit, the payment history would show up on both credit reports while only the primary account holder would be responsible for the payment.

Authorizing someone on your credit card is risky!

I don’t care how much you trust this person, here is what you are doing by authorizing someone else on your credit card:

1. You are solely responsible for every aspect of the account –including the payment!
2. With the new FICO changes, the other person will see NO positive changes in regards to their FICO score
3. If they charge up a huge balance on the credit card, it’s your responsibility to pay it off.

Sign up for a Joint Account instead!

While creditors may look more closely at a credit score when opening a joint account, setting up one of these accounts can be a much safer bet. Plus, both people will see the positive credit score gains!! And, since it’s a joint account, both people are responsible for the payment and both names are on the account.

Get a secured credit card otherwise

If you are unable to get a joint account with another person, I suggest (as I have suggested many times before) signing up for one of these secured credit cards that I have used myself and been very happy with.

Follow this link to ask a question or join in the discussions Note: I have also created a tab at the top labeled “Forums” if you’d rather use that

Although this has happened to me before, it was several years ago (before I really paid much attention to my credit score, or even knew I could get it removed). I am sure many of my readers have made the same mistake, so I’d like to show you 3 ways to get a late payment removed from your credit report. Just in case you’re wondering, I was able to get this late payment entry removed from my credit report by mailing the original creditor this goodwill letter.

In my experience, as long as you don’t have several late payments on the same account, it’s really not that difficult to get them removed. Here are three methods you can use to get them removed.

1. Request a Goodwill Adjustment from the original creditor to remove the late payment

The idea is simple and it works incredible well. Many times creditors are happy to grant “goodwill adjustments” if your previous payment history is relatively good and you have established a good relationship with the creditor. This is probably the easiest and surest way to get a late payment removed from your credit report. I wrote a whole article describing how to do this. You can also use this sample goodwill letter I created

2. Negotiate removal by offering to sign up for automatic payments.

I have never actually tried this method myself, but from what I understand creditors frequently offer to remove late payment entries if you, in exchange, agree to sign up for automatic payments. I really like this idea because it works out well for both parties: the creditor can ensure future payments will be made on time, and you don’t have to ever worry about missing another payment. I would love to hear from those of you who have succeeded with this method!

3. Dispute the late payment as inaccurate

Sometimes creditors have a difficult time verifying the exact details of your account history. Therefore, if you dispute the late payment and they are unable (or simply don’t bother) to verify it, the negative entry will be removed.

1. Canceling credit cards will improve your credit score. False!

   This is untrue for the simple fact that one of the largest determining factors of your credit score is age. In another words, by closing credit card accounts, in most cases, you are shortening your average credit account age. Many times this is advised by credit counselors for people who cannot control their spending, however, this does not translate into a credit score improvement by closing accounts.

2. Paying down installment debt will increase your credit score. False!

   Paying down installment loans such as student loans, personal loans, and mortgages will not improve your credit score. In short, FICO does not care about the amount of the loan –just that it’s being paid on time.

3. I only have ONE credit score. False

   The fact of the matter is, in most cases, you have THREE credit scores. Yes, there are three major credit agencies and while FICO uses the same method to calculate your credit score between agencies, there are usually minute differences between each credit report you have with these three agencies that translate into three different scores. What does this mean? It means that your credit worthiness partly depends on which credit report happens to be pulled when you apply for credit.

4. Once a negative entry is put on a credit report, there is absolutely NO way to get it removed until the required 7 years is up. False

   There are several methods that you can employ to remove negative entries from your credit report. In fact, I can say that the worst (credit wise) items on my credit report I got removed by sending off various letters. Check out these negotiation letters I have written for this very reason.

5. Holding a credit card balance is good for your credit. False

   Actually, it’s the opposite. While it’s good to have credit card activity, the best way to improve and maintain a good credit score is to keep either a very low balance or no balance at all.

6. When multiple people apply for a home loan, ALL of their credit scores are taken into account. False

   If, for example, you and your spouse are applying for a home loan, the only credit score that matters is the person with the HIGHEST income. Note: This is general practice. Some lenders do take all borrowers into account.

Credit Card Debt can be a monster. Sort of like a giant tidal wave coming right at you. The closer it gets, the bigger it grows and when it hits you, total devastation. That tidal wave began as a small ripple somewhere out there in the vast ocean. Credit Card Debt followed the same path. It started out as one simple charge and then one day you have 4 Credit Cards and a mountain of Debt. Don’t feel all alone. Credit Card Debt around the world has grown into the billions of dollars. Too many consumers wake up one day and realize that Credit Cards are easy to use but very hard to pay off. So, what do you do now? There is no easy fix. It will take discipline and plenty of it.

Discipline is often considered a punishment. Don’t look at it this way. In this case, look at discipline as a form of financial self-control. You have to remedy the situation. It will take determination and dedication rolled into one. You cannot just talk the talk; you will have to walk the walk. You have to come up with a plan. Your very own road map to financial success. You have to look at your personal finance like you were running a business. You want to treat your home budget like a business and strive to make a profit. To accomplish this you will have to know how much money you have coming in and how much you owe out.

• Make a list of the money you have coming in.
• Add it up and get a total.
• Make a list of the money you owe out, like rent, food, car payments, insurance and cable television.
• Add up all the minimum monthly credit card payments as well.
• Now add up your monthly credit card payments and your other money owed out.

Let’s say your total outgoing expenses comes to a total of $2000 a month. . Let’s hope that the incoming amount is higher than the out going amount! We will propose that the incoming amount is $2400. You should have a $400 profit each month. Use some of this extra money to pay off your lowest Credit Card Debt. Look at it as though you were putting money back into the business. Continue to do this each and every month until you pay down the card. When you have paid one down, move on to the next. You have to continue this cycle until you have paid your Credit Card Debt off.

Now of course, for this to be successful you cannot keep using the cards. This would of course defeat the purpose. If you want to eliminate the problem, you have to form a plan and then utilize it. No one can do it but you. Although the road will be uncomfortable from time to time, when you reach the final destination you will be rewarded. Once you have gotten your Credit Card Debt under control, learn to pay them off in full each month. You never win by making the minimum monthly payment. Pay the balances off and you just may be able to benefit from one of the many rewards programs that are offered. Just remember, it takes Discipline in dealing with Credit Card Debt.

Jay

Hi Jay –

First you need to get your girlfriend’s current credit report and see if the account is being reported as a collection. It’s very possible that it is since she was contacted by a collection agency. Nonetheless, it’s very important to know if it’s on her credit report because it will dictate how the situation should be handled.

If it hasn’t been reported yet, you need to have her contact the collection agency right away via mail. Do not deal over the phone with these people. Write a letter that states you will pay off the collection in full if they agree in writing that the account will not be reported to the 3 credit reporting agencies. Also, in the letter make sure she doesn’t admit the account is hers. Send everything via certified mail.

If the account has already been reported to the credit agencies (more likely) then she needs to do two things.

First she needs to write a debt validation letter to the collection agency. These letters should be very simple. Simply ask that they verify the following information:

• The name and address of the original creditor.
• Detailed information showing how the “Balance Owed” has been calculated.
• Proof that the statue of limitations as defined by the State of [your state] has not expired.

Now, this next step is very important and needs to be done right after the letter is sent (like the next day). Dispute the collection account with ALL 3 of the credit agencies. Dispute it as “no knowledge of this account”. Search for “dispute” on my blog to see my post on how to do this.

The reason why you want to dispute it right after you send that letter is because the Fair Debt Collection Practices Act forbids the collection agency from responding to any requests regarding the debt while you have requested that the debt be validated. Therefore, when the credit agencies contact the collection agency to verify the account that was deputed, by law, the collection agency can’t respond and the credit agencies will be forced to remove the account from your girlfriend’s credit report.

This technique works extremely well.

Good Luck

Ryan

When I finished college I forgot to turn in my dorm room key. A couple of week later I received a bill in the mail for $70. My response was something like, “Screw you, I have given your institution over 20 grand for a semi-lousy education –most of which I could have learned on my own.” Their response was something like, “Okay, we’re sending this to collections.” Now I don’t know how the debt got paid, because I never paid it (for I vowed never to do so). Perhaps in the chaos of wrapping up everything, my parents paid it?? I cannot be for certain, but still, it showed up as ‘paid’ on my credit report.

Forward 3 years

The entry still showed up as ‘paid collection’ on my credit report and was therefore hurting my credit score 50+ points. Here is how I got it removed: I kindly asked them to remove it out of goodwill using a little known method called ‘writing a goodwill letter’.

If memory serves me correctly, my letter went something like this:
Dear Sir/Madam,
Following college graduation, I accidently forgot to return my dorm room key. The university sent me a bill for $70 which I was unable to pay. I had very little money and was trying to get on my feet, and therefore the $70 dorm room key charge was sent to your collection agency. The collection has since been paid. I am now on my feet and attempting to purchase a home for my family, but am unable to receive decent mortgage rates due to having a collection on my credit report. I am kindly asking that perhaps out of goodwill, your agency would consider removing this collection from my credit report and thus helping me purchase a home.
Best regards,
Ryan Lynch

I didn’t expect this to work, but three weeks later the collection was completely removed from my credit report.

Many people have small paid collection entries on their credit report and probably don’t realize how much these little bastards are hurting their credit score. In all sincerity, you’d be surprised how well goodwill letters work. They work best on small collection accounts, and the key is to make them feel sorry for you.