A collection on your credit report can cost you as much as 100 points, even healthcare collections like AAA Collections buys.
AAA Collections is a small company that works with healthcare companies with unpaid bills. Healthcare companies turn the debts over after they’re unable to collect payment, usually after 120 days.
If you have AAA Collections on your credit report, it’s important to know how to remove it.
Understand your Rights
First, know that AAA can’t harass you. They may only call during the hours of 8 AM and 9 PM, and they can’t call you at work if you request they don’t. They also can’t call third parties to get information about you or to harass you further.
AAA can list the debt on your credit report and try to get the money back from you. They may call you often and/or send written communication.
As soon as they contact you, the clock starts ticking. You have 30 days to make the first move, and sometimes that’s all you need to remove AAA Collections from your credit report.
Validate the AAA Collections Debt
Your first step is to validate the debt. You don’t know AAA Collections or if they’re a legit company. Validating the debt verifies their legitimacy and that they have the right to handle your debt.
Request validating in writing. In the letter ask them to validate:
- The name of the original creditor
- The amount of the bill
- The date of the service or debt
- The account number
- Provide proof they may do business in your state
This information is crucial. It shows you that the collection agency is legit and that they have your account and aren’t trying to scam you.
If they can’t validate the debt, they must remove the tradeline from the credit report.
But, they can validate it, you have more work to do.
Settle the Debt
If AAA validates the debt, you owe it. Now what?
The good news is they likely bought it for less than you owe. This gives you room for negotiation. If you can’t pay the full amount, negotiate. Ask to pay a smaller amount. Make sure the amount you propose you can pay in full if they agree.
Here’s the catch.
Don’t just agree to pay it. Ask for a pay for delete. If you pay the agreed upon amount, they agree to delete the collection from your credit report.
If they agree, get it in writing. Don’t pay anything until you have written proof. Even if they agree verbally, ask them to send you a letter stating the agreement. If they don’t follow through, you’ll have something to take the credit bureaus to dispute the debt.
Dispute the Debt
Even after AAA validates the debt, or if you miss the 30-day deadline, you can dispute the debt. IF there’s something that isn’t right about what they reported, go directly to the credit bureaus.
Write a dispute letter and include the incorrect information. AAA has 30 days to respond to the dispute. If they don’t, the credit bureau can remove it from your credit report. If they respond and prove what they reported was right, you’re back to settling the debt.
If you don’t want to deal with this yourself, hire a reputable credit repair agency. The credit professionals can do the disputing, validating, and negotiating for you. Some will even write a cease and desist letter if AAA keeps calling you despite your attempts to get them to stop.
Don’t be Overwhelmed
Here’s the trick.
Don’t get overwhelmed.
Yes, collections on your credit report are scary. They hurt your credit score in a big way, but your credit score changes monthly and there are ways to help.
If you act fast (within 30 days of first contact), you may get the debt removed right away. If not, keep going. You have more options even if one includes paying the debt. If you legitimately owe it, then pay it. You’ll bring your credit score back up by getting the collection off your credit report and you’ll feel better about paying your debt.
If it’s not yours, the law is on your side. Keep pushing until you remove the collection from your credit report and you can build your credit score up again.