Remove Collections from credit report

[Patrick Forelli]

Hi BP community.

I am a real estate investor and I bought an STR last year thats going really well. I want to buy another one but my credit score recently tanked due to a collections filing from a property I rented. I have since paid the collections.

Prior I had a 740 credit score. After the collections I have a 640 credit score and it hasn't moved for a few months.

I rented a property with a few friends for a year and after move out we were charged with over 6000 $ in B.S damages including 5k to repaint all the interior walls of the home due to a few minor marks. After doing some research it was clear that this management company makes a habit of doing this and that these were unfair charges. We decided to fight the charges and file a case in small claims court (not knowing the future impact of a dinged credit). We got our case dismissed because the property management company had an un-servable address and the only way to file a case was to do it across the country in Arizona which we were not willing to do. Taking off of work and having over a thousand in travel expenses without a guaranteed win did not seem worth it.

I talked to the credit agency and it turns out this will ding my credit for the next 7 years even though the debt is fully paid off. This is really disappointing because I am ready to purchase another property today but will not get approved or have horrible loan terms due to a 640 credit score.

Does anyone have any recommendations on how to remediate this issue? Is there anything I can do? Does filing a case in small claims court excuse my collections filing?

Thanks,

Patrick Forelli