3 Steps to Remove Portfolio Recovery Associates from Your Credit Report
Have you recently been contacted by a company called Portfolio Recovery Associates? As I’m sure you’ve figured out by now, Portfolio Recovery is a collection agency whose entire business is to attempt to collect debts from companies that have been unable to collect those debts themselves.
How Does Portfolio Recovery Associates Work?
Portfolio Recovery Associates typically buys a lot of old debts from companies who have already “charged off” the accounts. In other words, when the original creditor has been unsuccessful in collecting on a debt, they will write that debt off and effectively take it off the books. This is referred to as a charge off.
However, in an effort to try to recover some of its losses, the originating company can legally sell its charged off debts to a third party collection agency. This is where Portfolio Recovery comes in.
Portfolio Recovery will purchase this debt at pennies on the dollar with the hope that they will be able to collect more from the person who owes the debt than what Portfolio Recovery Services purchased it for. This is how they make a profit.
How to Deal with Portfolio Recovery
You may have received either a letter in the mail or a call from Portfolio Recovery. If they call you on the phone, I recommend telling them that you know your rights under the Fair Debt Collection Practices Act and that all future communication should be done via mail.
One of the biggest mistakes I see people make is that they deal with collection agencies over the phone and end up getting in a situation where the collection agency agrees to something, but since it’s not in writing, they don’t really have to follow through on it.
With this in mind, keep it simple and do all your business with Portfolio Recovery by mailed letters. This way you have records of all communications in case you need it in the future or they attempt to sue you.
How to Remove Portfolio Recovery From Your Credit Report
Now that we’ve gone through how to deal with these people, let’s get into how to remove the negative entry (more than likely a collection) from your credit report.
#1 Make Portfolio Recovery Associates Prove the Debt is Yours
The easiest way to remove a collection from your credit report is to make Portfolio Recovery prove that the debt is yours. Under the Fair Debt Collection Practices Act, you have the right to request that a company attempting to collect on a debt validate that the debt is indeed yours.
The good news is that since you’re not dealing with the original creditor, but rather Portfolio Recovery who bought the debt, it’s more likely that they will be unable to validate the debt. This is because the information they have about the debt might not be accurate or complete.
The downside is that you only have 30 days from the first time they contacted you to demand that they validate the debt. If it’s been beyond 30 days, it will be more difficult to use this method.
You should use a debt validation letter and send it to them as quickly as possible. If they are unable to validate the debt, they’ll have to stop attempting to collect on the debt and remove it from your credit report.
#2 Offer to Pay Portfolio Recovery Associates to Remove the Collection on Your Credit Report
When you’re unsuccessful with the debt validation method, or it’s been over 30 days, your next option is to offer to pay the debt in order to remove the collection from your credit report.
You don’t always need to offer to pay in full. In fact, since Portfolio Recovery likely purchased the debt for much less than what they are attempting to collect, it’s very likely that you will be able to negotiate with them. I would start at 50% of what they are asking and go from there.
Again, when using this technique make you get everything in writing and never do this over the phone. Also, never give them access to your bank account. When you have both agreed on an amount, write them a check. You’ll want to follow up in 30 days to make sure that they have removed the collection from your credit report. If they haven’t, write them another letter demanding that they fulfill the agreement.
#3 Hire a Professional to Remove the Collection