Can You Remove Negative Information from Your Credit Reports?

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Your credit reports are like a financial report card — an extremely useful record that helps lenders evaluate the risk involved in loaning money to you.

They contain information about your credit history — including some bill repayment activity — and the status of your credit accounts. This information includes how often you make your credit card or loan payments on time, how much total available credit you have, how much of that credit you're currently using and whether you have outstanding debt.

If you're delinquent on your loan payments, your debt may be transferred or sold to a collection agency. At that point, a new lender will be added to your credit reports, meaning your debt will appear twice: once with the original lender and again with the collection agency. You will have a set period of time to pay off the debt with the collection agency. The debt will stay on your credit report for as long as it remains unpaid and can only be removed approximately seven years from when you were first found delinquent.

Can debt collectors remove negative information from my reports?

Unfortunately, negative information that is accurate cannot be removed and will generally remain on your credit reports for around seven years. Lenders use your credit reports to scrutinize your past debt payment behavior and make informed decisions about whether to extend you credit and under what terms. Therefore, it's just as important for them to see your negative credit history as your positive history.

If you discover, however, that negative information is still on your credit reports after seven years and you have paid off the amount as agreed, you should immediately file a dispute.

You can dispute the negative information sooner if it appears on your credit reports multiple times. You can also dispute the information if it's a result of fraud or identity theft. It's important to report the fraud or identity theft immediately to the three nationwide credit bureaus so that you can get your financial life back on track.

If your debt is turned over to a collection agency, you can try to negotiate with them. For example, you can ask the agency if it would accept less than the amount you owe. If the agency agrees to a new amount, the debt will not be removed from your credit history, but you can ask them to report your debt as “paid in full” after your final payment. While your credit reports will still reflect that you were delinquent on payments, they will also show that you paid your debt in full, which may make you appear less risky to lenders. If the collection agency agrees to any of your requests, you should immediately ask for written confirmation of the new terms.

Be warned that there are many credit repair companies that claim they can have negative information removed from your credit reports for a fee. However, neither you nor a third party can get negative but accurate information removed.