Removing a settled account from your credit report can require effort, but it’s well worth it for the positive impact it can have on your credit score. Typically, negative accounts bring down your scores substantially and take a long time to recover from. If you manage to get a settled account off your credit history, you should notice an uptick in your overall score almost immediately.
You can follow this four-step plan to remove settled accounts from your credit report:
- Pull your reports from all three bureaus
- Verify every detail on each settled account
- Dispute any errors with documentation
- Send a goodwill letter requesting removal
This detailed guide will explore exactly how to remove settled accounts from your credit report in three simple steps.
NOTE: You can typically only remove settled accounts if there’s an error in the reporting or by submitting a goodwill letter. Otherwise, you may have to wait for the account to drop off your report after 7 years.
Table of contents
What is a settled account?
A settled account is when a lender agrees to accept less than the full amount owed to resolve the debt. While settling can provide financial relief, the account typically remains on your credit report for years, making it harder to rebuild your credit score.
If you have a settled account on your credit report, you can follow these four steps to try and get it removed.
Step 1: Obtain your credit reports from all major bureaus
Start by pulling a fresh copy of your credit reports from the three major credit bureaus: Equifax, Experian, and TransUnion.
A credit report is a detailed record of your borrowing history – open and closed accounts, balances, payment behavior, and public records – that lenders use to evaluate your creditworthiness. It’s important to pull all three reports because creditors don’t always report to every bureau, so an error may appear on one report but not the others.
You can get your free credit report by visiting AnnualCreditReport.com.
If you prefer, you can also contact each bureau directly to review your report. Or, you can use a third-party credit monitoring site to check the accuracy of the account and file a dispute.
📝 MoneyLion Tip: Save your reports as PDFs and note the date you retrieved each report so that you can track your progress over time.
👉 How to Get a Free Credit Report: Step-by-Step
Step 2: Review your settled accounts for accuracy
Scan each report for settled accounts and confirm that every key field matches your records. This includes information like:
- Creditor name
- Account number
- Current balance
- Account status (settled, paid, closed)
- Dates of delinquency
- Charge-off
- Settlement
Make sure each detail aligns with your settlement agreement and payment history to avoid lingering inaccuracies that could hurt your credit. If anything looks unfamiliar or incorrect, set it aside – you’ll need this information when filing disputes with the credit bureaus.
Step 3: Dispute inaccurate information with credit bureaus
If any amounts, dates, or statuses are wrong (or if an account shouldn’t be there at all), file a dispute with the relevant bureau(s) online or by mail. Be sure to include all relevant documentation by following these steps:
- Gather proof: Gather your settlement agreement, final payment receipts, creditor emails/letters, and your notes with dates.
- File disputes online or send letters via certified mail: Include copies (not originals) of your documents and clearly state what is incorrect and what the correct information is.
- Track confirmations: Bureaus generally must investigate and respond within 30 to 45 days and notify you of the results. If the furnisher can’t verify the info, the bureau must correct or delete it.
A dispute is a formal challenge asserting that information in your report is inaccurate or incomplete.
Monitor your credit report for updates
Dispute outcomes and furnisher updates don’t show up overnight. Check your reports again 30 to 90 days after you file disputes or finalize any agreements to confirm corrections have posted.
Keep a log of all communications and save bureau decision letters. If you don’t receive a response within the required timeframe, follow up with the bureau and the data furnisher.
This brings us to the next question: Can you get a settled account removed from your report, even if the account is legitimate? Here’s your best option.
Step 4: Send a goodwill letter requesting removal
If your report is accurate but you’ve demonstrated strong recent payment behavior, consider a goodwill letter to the original creditor or debt collector.
Explain the circumstances that led to the delinquency, note that the debt has been paid or settled, highlight your positive track record since, and politely request removal (or at least the removal of late-payment notations).
Be specific, include supporting documentation, and keep the tone professional. While not guaranteed, goodwill adjustments are more likely when you have a clean history post-settlement and a longstanding relationship with the lender.
When to consult a credit repair professional
If your disputes keep getting denied, the process feels overwhelming, or you’re unsure about complex issues (such as mixed files or potential re-aging), consider speaking with a reputable credit repair professional or consumer law attorney.
They can’t remove accurate negative information, but they can help you build a documentation trail, escalate disputes, and spot legal violations.
How can settled accounts affect your credit score?
When you settle an account, it’s likely already gone to collections and affected your credit score.
Although paying your debts is a good thing, a settlement agreement means you paid less than what you actually owed the creditor. The inability to repay your debts always raises red flags. It’s a negative entry on your credit report and can remain there for years. The impact on your credit typically lessens over time, but it can still drag down your score as long as it’s reported.
How long do settled accounts stay on your credit report?
Settled accounts stay on your credit report for seven years from the date of your first late payment. The clock starts with the original date of delinquency and won’t restart just because you made a payment or settled the debt. After seven years, the settled account should automatically fall off your credit report.
Can a settled account be removed from your credit report?
Unless the information reported to the credit bureaus is incorrect, you won’t be able to remove the settled account from your credit report. You can try to negotiate with the creditor, but the debt can stay on your credit report, regardless of payment status.
Why should you aim to remove settled accounts?
If you don’t fix up your credit score, you may find you’ll have more difficulty getting loans, which could prevent you from being able to buy a car or house.
Plus, the amount of money you don’t repay could be considered taxable income with the federal government, which could be a tough surprise come tax season. Payment history makes up 35% of your credit score, and if that history reflects delinquency and an account that was technically never paid off in full, the settled account will drag down your credit score for years.
How long does the process of removing settled accounts usually take?
Disputes on your credit card normally take a few weeks to settle. That includes a request to remove settled accounts, even if they’re there properly and not in error. If you think a settled account should not be dragging down your credit score, you should reach out to the reporting agency directly to ask them to remove the negative reporting on your credit score.
Getting a Settled Account Off Your Credit Report
Removing a settled account from your credit report isn’t easy, but it is achievable with some effort and persistence. If the original creditor or collection agency won’t agree to remove the account, file a dispute with one of the three major bureaus.
With some hard work and dedication, you should eventually be able to get any inaccurate or outdated information removed from your reports.
FAQs
Can I hire a credit repair agency to remove settled accounts?
Yes, you can pay a credit repair agency to attempt to get a settled account off your credit score, but there’s no guarantee it will work.
What should I do if the credit bureaus refuse to remove settled accounts?
If credit bureaus won’t remove a settled account from its calculation into your credit score, you’ll have to wait seven years for it to fall off on its own.
Can I remove settled accounts if they were sold to a collection agency?
Yes, settled accounts can be removed even if you settled them through a collection agency. If the agency won’t remove the account from your credit report, reach out directly to the credit reporting agencies to see whether it will.
Can settled accounts be removed from my credit report before seven years?
Sometimes, if the information is inaccurate or unverifiable, or if a creditor agrees to a goodwill request. However, accurate negative data generally remains for up to seven years.
What is the fastest way to remove a settled account?
The quickest route is a successful dispute of an error or a documented goodwill request.
Will disputing a settled account automatically delete it?
No. A dispute only leads to deletion if the bureau’s investigation shows the entry is inaccurate, incomplete, or cannot be verified.
How long does it take to see credit score improvements after removal?
If a negative account is deleted, you may see changes within a few weeks to a few months, depending on when lenders and bureaus update their data cycles.
