Direct Recovery Services: What It Is, And Why It’s On your Credit Report

Written by Justin EstesUpdated: 31st Mar 2022
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Does Direct Recovery Services show up on your credit report? You’re probably scratching your head wondering who they are and why they are on there.

Chances are you defaulted on a debt that Direct Recovery Services wants to recover for the original creditor. It’s not a good thing if they’re on your credit report.

It hurts your credit score and chances of future credit approval, but there are ways to remove Direct Recovery Services from your credit report.

I show you how this works below.

What is Direct Recovery Services?

Direct Recovery Services is a debt collection agency. If you find them on your credit report, you probably defaulted on a debt.

They are a legit company that has been in business since 2015 and is headquartered in Minnesota. They are a medium-sized business.

How to Remove Direct Recovery Services from Your Credit Report

Just because Direct Recovery Services is a legit business doesn’t mean you want them on your credit report.

First, a collection agency tradeline – also known as a collections account – means you defaulted on a debt pretty badly. Creditors don’t send accounts to collection agencies until you are well past 90 days late.

Second, the collection account may or may not be legitimate. The Fair Credit Reporting Act (FCRA), gives you the right to dispute any unfair or inaccurate information a collection agency, such as Direct Recovery Services reports about you.

So here’s how to remove Direct Recovery Services from your credit report:

#1. Hire an Expert

The best credit repair companies can help you remove Direct Recovery Services from your credit report effectively.

If you don’t have the patience or time to deal with the back and forth and necessary communication, rely on the expertise of a reputable credit repair company.

A credit repair company CANNOT remove valid negative credit information, so keep that in mind. If you owe the debt, there are other ways to remove it from your credit report.

But, if the collection agency can’t validate the debt or they misreported anything, a credit repair company can make sure the credit bureaus delete it. Our personal favorite is Credit Saint. They have years of experience and offer the best credit repair services.

If you don’t want to pay for credit repair or think you can handle it yourself, try the following.

#2. Request Debt Validation

You have to act fast on this one. You have 30 days from the day the collection agency first contacts you to validate your debt.

Request it in writing. Ask the company as many details about the original debt as possible. The debt collection agency must provide written proof to validate the debt. Chances are they won’t be able to because they have minimal information about the account.

If they can’t validate it, they must delete it from your credit report. If this is the case, follow up with the credit bureaus 30 days after they agree to delete the account to make sure it’s gone. If not, dispute it with the credit bureau again and keep doing so until they remove the collection.

>> More: How to Write A Debt Validation Letter

#3. Negotiate a Pay for Delete

If you messed up and missed the bill, it’s okay. If the collection agency validates the debt, you’re on the hook, but that doesn’t mean it must stay on your credit report.

Before you pay the bill, negotiate a pay for delete. This doesn’t mean pay the bill in full. You can still negotiate the amount.

Remember, Direct Recovery Services bought your debt for less than it’s worth. Negotiate the amount and the terms – in other words, a ‘pay for delete.’

When the agency agrees to a dollar amount that you can pay, make sure they agree to delete the collection from your credit report. GET THIS IN WRITING.

A verbal agreement means nothing. Nothing is binding about it. With a written letter, they have to follow through, or you can dispute it with the credit bureau.

#4. Send a Goodwill Letter

If not paying the bill was a complete oversight, write a Goodwill letter. Collection agencies don’t have to approve it, but it’s worth a shot.

A Goodwill Letter is basically a plea for your situation. Provide legitimate reasons why you missed the payment. Did you fall ill or lose your job temporarily?

The pandemic caused millions of people to fall behind. If you had a good payment history up to this point, the collection agency may take pity on your situation and agree to delete the collection if you pay it.

Of course, this means you must pay the debt, but if it is legit and just an oversight, you probably want to make good on your debt.

Direct Recovery Services Consumer Complaints

Everyone complains about collection agencies; after all, they are trying to get money from you. But most consumers complain that the representatives from Direct Recovery Services are rude and harassing.

Most people aren’t aware of the collection Direct Recovery calls them about, and the representatives give very little information to help them.

This is why validating the debt is so important. If Direct Recovery Services can’t validate the debt, the credit bureau must remove it from your credit report. Remember, you only have 30 days to make that happen.

How to Contact Direct Recovery Services

  • Mailing Address: 629 7th Ave, Suite 1, Two Harbors, MI 55616
  • Phone Number: 646-938-3123

Frequently Asked Questions

How Does Direct Recovery Services Work?

Direct Recovery Services works a little differently than a standard collection agency. Typically, collection agencies buy the debt for pennies on the dollar. They then try to get the full amount of the past due balance from consumers.

Direct Recovery Services works differently. They partner with specific creditors and rather than buying the debt, they work in conjunction with the creditor. If Direct Recovery Services receives payment, they get a percentage of it from the creditor.

Regardless of how they work, Direct Recovery Services sits on your credit report, hurts your credit score, and makes it hard to get future credit until you take care of it.

They will likely call, text, and email you until you make good on the debt. Your best bet is to first validate the debt and then decide how to proceed whether you dispute it, ask for a Goodwill deletion or pay for delete. If you don’t want to handle any of that yourself, hire a credit repair agency to do it for you.

Can Direct Recovery Services Sue Me?

Any collection agency can sue you, but they aren’t likely to do so. It’s not worth the chance, though. Don’t let the collection sit untouched. While you shouldn’t rush to pay it in full, you should figure out a solution to satisfy the debt fast.

Can You Remove Direct Recovery Services Collection Accounts from Your Credit Report?

Technically, once something is on your credit report, it remains there for 7 years. If you use the steps above, you may get it removed, though. If you can’t, at the very least, negotiate the settlement amount and pay it. Direct Recovery Services must notate the account paid as agreed. This will help future lenders see that even though you defaulted on your debt, you were able to make good on it too.

Bottom Line: How to Remove Direct Recovery Services from Your Credit Report

Don’t ignore Direct Recovery Services if it shows up on your credit report. If you ignore it, the tradeline stays there for 7 years and hurts your credit score considerably.

Work with a credit repair agency or do the work yourself. Find a way to remove it or at least settle the debt for less than the full amount so you can move on with your life and show other creditors that you make good on your debt (after ensuring it’s legit).

Justin Estes
Justin Estes

Justin Estes is a Senior Personal Finance Writer who is a recognized small business accountant, consultant, and credit card expert. His background in accounting and finance led to a passion for helping people make the most of their money and matching them with financial products that enhance their lifestyle. Justin attended Charleston Southern University where he double-majored in Finance and Accounting. Justin’s areas of expertise are credit cards, small business finance, accounting, and taxes.