How to Keep Collection Activity From a Credit Report

If you do not pay an unsecured debt, your creditor has nothing to repossess to recover the balance. To procure a payment, the creditor will often charge off the debt and sell the account to a collection agency. Collection agencies frequently report their ownership of consumer accounts to the credit bureaus. An entry on your credit report from a collection agency is always derogatory. It will not only lower your credit score, but it will appear within your credit file for seven years. There are actions you can take, however, to prevent a debt that has been purchased by a collection agency from appearing on your credit report.

Verify that you do, in fact, owe the debt. The Fair Debt Collection Practices Act requires collection agencies to grant a consumer a 30-day grace period in which to request proof that the debit is legitimate and legally owned by the debt collector. Upon first being contacted by a collection agency, send a written request for validation. Collection activity, including credit reporting, cannot legally commence until the company provides you with the requested information.

Contact the collection agency and offer a payment plan or a debt settlement agreement. Only agree to pay on the grounds that the company agrees not to report the debt to your credit report during repayment or after you have paid off the settlement.

Request a signed copy of any agreement that you reach with the collection agency before making any payments on the account. This ensures that in the event a mistake is made, you will be able to have the derogatory information removed from your credit file.

Make payments on the debt as agreed. Missing even one payment will render your original arrangement with the collection agency null and void. When this occurs, the company is likely to immediately report the delinquent account to the credit bureaus.

Monitor your credit report regularly. Even if you have a signed statement claiming that the negative information will not appear within your credit file, mistakes occur. By monitoring your credit report you can catch mistakes early and petition the collection agency to rectify the error.


  • If you negotiate a debt settlement with the collection agency, request a statement in writing from the company that states it will not sell the unpaid balance to another debt collector once you have finished making payments.


  • Never agree to allow a collection agency to debit payments directly from your checking account. You may sign the agreement only to discover that a greater amount has been debited than you originally agreed to.