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How to Dispute Collection Accounts on reports


An inaccurate or misleading collection account will lower your credit score. Either because of clerical errors or miscommunication, collection accounts are among the most common errors on credit reports. That’s why factual disputes are better than disputing “account not mine”, especially if the account is really yours.

To find factual errors go through the negative tradeline and list every error, inaccuracy, incomplete or false thing you find. No doubt you can find a factual error or two, or three.

And when you find an error, request the credit bureau delete the negative tradeline, not make a correction. Corrected negative information is still negative.

The E-Oscar Investigation Method

Because the credit bureaus utilize the E-Oscar method of investigation, a consumer dispute is reduced to a two-digit code. This code is intended to best describe the dispute issue. What the code really does is reduce the credit bureaus’ time in processing disputes and eliminates the FCRA requirement for the dispute to be properly investigated.

When you should dispute collection accounts

You can choose to dispute a collection account at any time, however, there are times when disputing a collection account may produce better results. When an original creditor transfers a debt to a collection agency, the original creditor still owns the debt. It may be difficult to dispute in this situation. Working with the original creditor to resolve the debt may be the best option.

When the original creditor has sold the debt and it ends up in the hands of a junk debt buyer, you have a pretty good chance in disputing the debt and here is why. Junk debt buyers are collection agencies that purchase “old” debts and are working for themselves. Sellers of “old” debt include cell phone companies, utilities, medical companies, card issuers, and many other types of businesses.

Because junk debts are purchased for pennies on the dollar, debt collectors and junk debt buyers usually seek to negotiate a settlement with the debtor. They just want the money. Disputing the listing on your credit report may result in a deletion because they don’t have the time or desire to deal with credit disputes.

How to find a factual error

  1. Account reporting “One Month Term.” What terms and agreements did you sign and agree to when the debt collector purchased the debt? None. Collection accounts should not have one month terms.
  2. Account reporting as “120 days late”. How can this be? Collection accounts are not like original creditor accounts. You did not open an account with a collection agency and promise to pay monthly payments. The debt collector can report the last status from the original creditor but they cannot update lates on a monthly basis.
  3. Account is reporting as an “Installment”. Again, what terms and agreements did you sign and agree to when the debt collector purchased the debt? None. Is the debt collector posing as a bank, lender or finance company? Collection accounts are not installment accounts.
  4. Another common error is reporting the debt as revolving, which is not only inaccurate, but may cause the credit score to further decrease. The collection account now looks like another revolving account in default and will be scored along with other revolving accounts on the credit report.
  5. Account “ balance” or the “high balance” is incorrect.
  6. Many collection agencies pose as Data Factoring Companies. Even if the credit bureaus allow this deception, you did not open a “data factoring account” with them. Collection accounts are not “data factoring accounts.”
  7. The date of first delinquency with the original creditor is not reporting and according to the FCRA, Section 623, “…A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the date of delinquency on the account, which shall be the month and year of the commencement of the delinquency on the account that immediately preceded the action.”

You will probably find more than one factual error, however, do not list all of them in one dispute letter. Save some for later in case you do not get the desired result on your first round of dispute letters. Disputing negative tradelines based upon factual errors may eliminate the credit bureaus’ excuse of “previously investigated” notation.

Finding factual errors causes the credit bureaus to do their job properly. Frustrate the credit bureaus to the point they will follow the FCRA and actually investigate a dispute or even better, frustrate them to the point they will delete the negative tradeline.

It may not work every time but you will find you can get a lot more mileage out of dispute letters containing factual errors whether than disputing “not mine” only to have the investigation results come back verified.

There could be negative consequences to your credit score by disputing collection accounts so it is important to read “What you should know before disputing a collection account.”

Dispute collection agencies that are listed twice

Collection accounts often change hands with debt collectors selling accounts to other collectors making it possible to have more than one debt collector listed on your reports for one account. When this happens, you can typically have the older collection removed by disputing it with the credit bureaus.

Pay for Delete

If you can’t remove the debt by disputing it, try negotiating a “pay for delete” with the collection agency. With a pay for delete the collection agency removes the account from your credit report in exchange for payment. Send the collector a letter stating your interest in paying the account. Offer to make payment if the collector agrees to remove the entry from your credit report. Ask that the collector to return a signed copy of the letter to you to seal the agreement. Make sure you get the agreement in writing before you make a payment. Don’t make any payment, full or partial, until you have the agreement in writing. See (Sample Pay for Delete Letter.)

Options if disputing does not work

If you have exhausted your dispute efforts there are still options you can attempt. Make complaints to the CFPBthe FTC, or your state’s attorney general. You can also sue the debt collector for this or other violations of the Fair Debt Collection Practices Act (FDCPA). If you sue under the FDCPA and win, the debt collector must generally pay your attorney’s fees, and may also have to pay you damages.

Consider allowing a professional repair your credit. Lexington Law helped clients remove 3,120,442 negative items in 2013 alone which included collection accounts. Other methods can be used to get rid of collection accounts such as debt validation, settle the debt and even pay for deletion of a collection account.



  1. Amber

    October 17, 2015 at 4:20 pm

    I’m glad I found this site. I have no past due accounts showing at all on my credit history. I’ve worked hard to get those accounts deleted. However, my credit score is still very low. Experian 583, Equifax 567, and TransUnion 574. I have had credit cards in good standing reporting on my account for over two years now. Unsecured Visa and Mastercards, Car loan with Capital One Auto, and a paid in full car loan with Ally….plenty of good credit. Yet, when I am denied credit it ALWAYS says something like “Numerous Finance Accounts”. Back when I did have credit issues, finance companies were a huge help. I now only have two open finance company accounts, but on my credit report there are 37 closed and paid in full finance companies with different lenders. Every single closed account shows a perfect payment history. My dilemma and question is this…..I’ve worked hard to pay everything on time these past years. I now need to buy a house in February and need my score raised. The finance companies are all local people that I know…..they have offered to complete delete the accounts from my credit….as if they never happened. But, will doing that lower my score because I paid those accounts well? Or, will it help my score to have those accounts deleted? The accounts are as follows: 10 closed with Security Finance, 9 closed with World Finance, 11 closed with Local Finance, 1 closed with Resource Finance, 3 closed with Associate Finance and 3 closed with Freedom Finance. In each instance, I would “renew” a loan which would in turn closed the old one and open a new one….I had no idea each time I renewed it reported as a newly opened account. It’s just a mess and I’m scared that if I have the accounts deleted it will hurt me more than harm me. I need some advice please. :) If you need some follow up questions answered before responding, please send them and I will give you more details. Thank you! My credit report is 27 pages long due to this account and i’m scare it will send a message to a loan underwriter that I am “risky” or that it will lower my score. My other option is to leave them on my report and when I apply for the loan write a letter of explanation that at the time I was under a hardship. Thoughts please! :)

    • Lisa Phillips

      October 21, 2015 at 12:14 am

      Congratulations on getting negative information deleted. That’s a huge accomplishment. The best advice I can offer is to continue making on-time payments and make sure credit card balances are paid in full each month. Try to carry a small balance on only 1 credit card and let the others report as $0, this will help your credit score.

      Now as far as the finance companies; I have to admit this is a FIRST for me — I’ve never heard of someone having so many. I can say for sure they are not helping your score, even though they were paid on time. I fully understand at times you have to do what you must but now your circumstances are different. If you have an opportunity to DELETE them, I strongly suggest doing so.

      Here is what may be keeping your scores low:

      (1) Too many accounts overall. Your FICO scores look at the total number of accounts you have. Consumers with a moderate number of credit accounts appearing on their credit reports represent lower risk than consumers with either a relatively large number of credit accounts.

      (2) Too many finance company accounts. Finance company loans represent a higher risk to lenders compared to having no consumer finance company loans reported. Even if the accounts are reported as closed, it can still impact your FICO scores.

      Here is a plan of action I suggest from now until February 2016:

      a. Pull your credit scores from (you want to monitor all three). It’s going to cost you something like $59.95 but it will be worth it to see your actual FICO scores and your FICO scores used for mortgage lending.

      b. Request a deletion directly from the finance companies of let’s say half of the 37 finance company loans. Wait for the deletions, it may take up to 30 days. Then pull your FICO scores from to compare the difference. If there is a boost in your scores then you know for sure the finance company loans are hurting your FICO scores.

      c. Ask the remaining finance companies to delete the tradelines. Wait for the deletions to take place then pull your scores a 3rd time. While I can’t guarantee a huge boost in scores, I am sure they will improve (as long as you have no current late payments and do not increase the credit utilization on your other accounts).

      Even if there is just a relatively small increase in scores, it will worth having the finance companies removed from your credit reports. Any mortgage lender would be hesitant, even with a good explanation, of offering you a mortgage loan with so many finance companies on your credit reports. Get rid of them.

  2. Judy

    August 31, 2015 at 11:10 am

    My husband has a collection account on his credit report. It lists the account type as “Open Account”, Loan Type as “Factoring Company Account”, Pay Status “In Collection”, and it also states the Original Creditor name. Can this account be disputed? I pulled his TransUnion credit report, and looked thru it to see when was the DOLA on the original cell phone account, and it is no longer showing on his report. Before I move try to dispute it, the credit report states that this collection account is scheduled to be removed 12/2015. Can I dispute it if it is listed as a collection account, and should I dispute it? Thank you for all your help.

    • Lisa Phillips

      September 10, 2015 at 5:50 pm

      The fact that the collection agency listed the account as a “Factoring Company Account” can be disputed. Factoring accounts are typically a transaction in which a creditor sells its account receivables to a financial company (factor). The accounts represent assets in good standing that have yet to be collected. The creditor can then receive quick cash rather than waiting to collect payment from a customer.

      Credit bureaus unfortunately allow junk debt buyers to pose as Factoring Companies when they are not. You have the basis for a dispute under FCRA, Section 623 because the “furnisher of information” is reporting inaccurate information to the credit bureaus. The issue is it may take several dispute letters to the credit bureau along with dispute letters to the debt collector before the listing is deleted. Be prepared to be diligent in your dispute letters specifically asking for proof of the “factoring documents” which are required to be filed with the Securities and Exchange Commission (SEC). You can challenge them for documents showing you factored any account receivable accounts with them, you signature on any factoring documents, security or bond documents I am sure are required by the SEC.

      It is highly unlikely they could produce said documents because none exist. I don’t know, you might get lucky and Transunion may just remove the account early. If not, you may want to consider whether the time involved is worth it since the account is due to be removed in a few months anyway.

      • Zephyr W.

        September 30, 2015 at 11:54 am

        Honestly, if the account is scheduled to be removed 12/2015 you might as well just wait it out, that’s like 2 months away.

  3. chimica small

    August 24, 2015 at 10:01 am

    I ONLY HAVE 1 BILL THAT WAS SENT TO COLLECTIONS FROM SPRINT !! MY CREDIT SCORE WENT DOWN 50 POINTS BECAUSE OF THIS !!! I SWITCHED CARRIERS AND THEY CLOSED MY ACCOUNT AT 600 BUCKS …THEN THEY SENT IT TO COLLECTIONS AND IT IS NOW 1800!!! THERE IS NO WAY IN HELL IM GOING TO PAY THAT!! But i have been working on my credit and that 50 point loss has me in the verge of tears all because i switched carriers and didnt even get a call or anything to resolve the issue!… help!!

    • Lisa Phillips

      August 24, 2015 at 1:03 pm

      The only options I can suggest are listed above. You can dispute the account if there is an inaccuracy or error to see if it comes off or you may be able to negotiate settlement for less and request a deletion as part of that settlement.

  4. David

    May 18, 2015 at 1:19 pm

    I have disputed entries by the top 2 bottom feeders with the Equifax. I called procedural error and 2 times they came back verified. Next step was to get the FTC, CPB and AG involved. disputed 3 more times since they are listing as “Open” Factoring accounts, current , no DLA, ect . Equifax again gave a bottled response that yes the account was mine because they have my name, address and phone number. Not once did they ever address the actual reason for the dispute. CPB is looking like a serious waste of time since they do not want to do anything and have knowledge of what a factoring account is.

    • Lisa Phillips

      May 19, 2015 at 11:19 am

      While I’m a big fan of the CFPB their investigators sometimes miss the mark in identifying the deception of certain junk debt buyers. Debt collectors reporting as “Factoring Companies” is an attempt bypass debt collection laws and unfortunately it sometimes works.

      From my understanding a factoring company buys debt that is in good standing, not debt that is in default. In order for monies to be factored, the debt must be in good standing. By the very action of purchasing “charged off” bad debt it should prohibit junk debt buyers from being factoring companies.

      It seems you have done all you can do on your own. It may be time to seek the advice of an attorney well-versed in the FDCPA and FCRA. Court action may be the only catalyst to either force the junk debt buyers to report correctly or preferably delete the accounts. I don’t see any way a JDB could prove in a court of law that they are a Factoring Company that purchased a debt “in good standing.”

      Clearly the JDB has violated the FDCPA for knowingly reporting inaccurate information to a consumer reporting agency which is known or should be known to be false, by reporting the account type as “OPEN”.

      They are also violating the FCRA for knowingly reporting inaccurate information to a consumer reporting agency “Type Of Loan: Factoring Company Account”.

      You may be able to get a free consultation with a consumer law attorney to get a clearer understanding of your options. has a listing of consumer law attorneys by state and specialty. Good luck to you.

      • DAVID

        May 19, 2015 at 11:34 am

        Well since I have had issues with a law firm hayte, hayte and landow ( yes another bottom feeder that sues you and hopes you don’t show up ) I keep an attorney on retainer to deal with issues if I can unable to make any headway.
        Yes, Factoring accounts are Accounts Receivables in good standing that are purchased for a % of the whole value. Unfortunately Debt collectors do use this to violate the law and can in no way ever prove that they purchased the debt while It was current.
        I also advise that everyone keep a history of their credit reports handy, it cant hurt to show how they were reporting previously.

  5. Kira

    May 12, 2015 at 4:26 am

    My CreditKarma is showing two cell phone accounts in collections and it says they were open this year. Those accounts havent been open for more than 4 years. How do I dispute this?

    • Lisa Phillips

      May 12, 2015 at 11:56 am

      Even though the credit report information you view at Credit Karma comes from Transunion and Equifax, Credit Karma is not a credit bureau. To make sure you are viewing accurate information you should first order your credit reports directly from the 3 major credit bureaus to check for errors or mistakes. Doing so will give you access to a “credit report number” which allows you to dispute information with the credit bureau reporting incorrect information.

      Credit Karma is not a credit bureau. They don’t gather information from creditors or collection agencies, and creditors or collection agencies don’t report directly to Credit Karma. You must order your reports directly from the credit bureaus then dispute the opening date of the collection accounts you mentioned.

  6. Ashley

    August 29, 2014 at 5:58 am

    How and what do I need to say to dispute a factual error? All 4 items on report listed as one month terms

    • Lisa Phillips

      August 29, 2014 at 8:14 pm

      The collection agency has not extended any type of credit to you. There are no terms existing, not even “one month” because you have no written agreement to pay them. I would dispute it based on the Fair Debt Collections Practices Act. FDCPA 807 (2)(a) that deals with misrepresenting the character, amount, or legal status of a debt. Also the Fair Credit Reporting Act at 623 (a)(1)(A) says furnisher of information (that would be the collection agency) cannot report information they know is inaccurate. The collection agency knows very well you do not have any type of “terms” with them. Request the credit bureaus delete the entire listing based on those factual errors. Now be prepared the collection agency could simply fix the error which means the listing can remain but it would be reporting correctly. Good luck to you.

      • Judith

        August 24, 2015 at 12:10 pm

        How do we dispute with the credit bureau’s? Do we send a letter, and if so, do you have a sample letter we can view?

        • Lisa Phillips

          August 24, 2015 at 3:17 pm

          Here is a guide to writing a dispute letter. I do not typically provide sample letters because they end up being sent verbatim, without any changes, and the credit bureaus frown upon “form dispute letters.”

  7. Mel

    August 8, 2011 at 7:53 pm

    I’m tackling my reports – and man is it a hefty task but thanks to people like yourself, it isn’t as hard as it could be.
    Here’s my question – I have 4 collection accounts (each duplicated 3 times – once in open accounts, once in neg. accounts and once more in closed accounts of my Equifax 3-in-1) They all state open or installment which I will dispute – but first, all of these collection accounts list the original creditor in the comments section but on my credit reports there is no record from each of these OCs (Bally Total Fitness (2xs), Sprint, Bright House Networks). What does that mean?? Do I have something going for me here, or does the OC not have to report at the same time the collection accounts are reported? If so, how would I compare? and if I do indeed dispute this, if it is correct, it’s probably possible for the original creditor to suddenly appear… Then it would be worse? I don’t know. All debts are $1500 or less and are reported as opened within the last three years.

    Any help would be greatly appreciated.

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