How to Clear Old Debt From Your Credit Report


Trying to get your credit score back on track? There are lots of things you'll need to do — like start using credit wisely instead of as a crutch. But before you can rebuild from the bottom up, it's important to clear the old debt you've accumulated from your record. Here's how.

1. Compare All Three of Your Free Credit Reports

Credit reports are not always created equal, which is why the process of clearing old debt from your credit card should start with comparing your credit reports from the three major bureaus — Experian, TransUnion, and Equifax. Download them for free annually at

What you're looking for when you receive the reports are inconsistencies. Debts may be listed by one bureau, but not the others. If this is the case, you may need to contact the bureau to check into the problem and dispute any irregularities, information for which will be included on the report.

2. Make Sure Your Delinquency Dates Are Correct

A delinquency on your credit report means that you've defaulted on the payment of your bill — this could be a credit card, car note, or a number of other loans that you've been provided. The real problem is that this lack of funds (and judgment) will stay on your credit report for about seven years. If that amount of time has passed since your delinquency date, however, and it's still on your report, you should contact the bureau that's misreporting it and rectify the situation.

3. Dispute Discrepancies With the Credit Bureaus

To dispute any delinquency discrepancies, it's best to write letters to the credit bureaus to request an investigation of a collection on your report. Send them by certified mail so you have a paper trail of evidence that you're being proactive about the situation. Credit Infocenter also has some important tips that may be helpful in this regard.

4. Find Out Who Owns the Debt If It Was Sold to Collections

If collection agencies are calling your phone nonstop, that means your debt has been sold by the original agency to the proverbial muscle men of the financial world; their sole job is to get the money you owe. If you've been avoiding these phone calls all along — a very common practice among those who have the misfortune of having collection agencies on their backs — you may not know who to contact once you're ready to talk to collections to finally settle the debt.

Personal finance blogger Jeff Campbell offers some tips on how to proceed.

"If the old debt has been sold to collections, it would be important to verify who currently owns the debt," he says. "Then it would be important to find out how much has been added to the original debt in terms of fees or penalties — these are all highly negotiable. The larger problem of ignoring old bad debts is that while in theory they drop off your credit report after seven years, when the bad debt gets sold (very common), that can sometimes start the seven-year cycle over again, so it's always better to deal with the issue and take care of it."

5. Validate the Debt

Before you pay anything to collection agencies, you need to validate the debt first to make sure it's accurate. By leveraging the Fair Debt Collection Practices Act, the collection agency will be forced to provide documentation that everything is on the up and up. Credit Infocenter suggests writing a letter to the collection agency (sent by certified mail) in hopes of settling the matter amicably, but if they're unresponsive you may have to threaten a lawsuit.

6. Settle Debts Higher Than $1,000

For any remaining debt under $1,000, you'll likely be required to pay it in full. If the debt is higher than a grand, however, there may be some wiggle room. Collection agencies don't want to keep your debt forever, and in many cases they're willing to negotiate a reduced amount that requires a lump-sum payment. For instance, I once had a $1,100 delinquent credit card that I was able to get down to $800. As part of this deal, you need to have the collection agency agree to remove the listing from your credit report.

When it comes time for the actual payment, be smart and trust no one.

"Don't pay anything electronically as it's highly possible they will charge more than agreed to," Campbell warns. "Pay by cashier's check or money order only once they agree in writing to settle the account as paid in full for the agreed upon amount and agree to remove any entries pertaining to this debt with all credit bureaus within 30 days of receiving payment."

7. Appeal to a Higher Authority

If your collector is a bank and you've reached out about removing old debt to no avail, you still have recourse. According to Bankrate, these institutions have federal regulators who field your complaints to keep everybody on the up and up. Again, rather than spending countless hours on the phone getting the runaround, send in a certified complaint with your evidence, which should include copies of your correspondence and return receipts along with the agency's complaint form that you can print online. At this point, the regulators' job is to contact the company on your behalf and get to the bottom of the ordeal. And start in your own state opposed to the creditor's state.

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