Need advice/help to remove a collection from credit report

[SELFMADE]

I am in dire need to have this one nasty collection out of my report ASAP as I am a college student and need funding to continue school. I applied for a new loan today with my old lender with exact same application and was surprised to that I was denied on the spot. Then I proceeded to check my credit report and found a collection for an unpaid traffic camera ticket for $100 dating back to 09. The fine supposedly had gone over to a collection agency. As I recall a collector called me 2 years ago to pay. I was going to but it completely slipped my mind since I had to save that amount money first. I never received any form of written/mail notification at all. Probably because I was moving frequently. To creep up on me like this is really unfair as I have diligently had taken care of my credit worthiness throughout the years. Now this situation is threatening to ruin my college career. The loan I want is with private lender, I don't have a co-signer. I called the collection agency asking how can I remove the mention of collection from my report. The person answering made it clear that he can't take it out just because I payed. I find that hard to believe thus I haven't made any payments yet.

I also check my FICO and it was 669. I understand anything below 700 is undesirable for student loans. The explanation at myFICO website showed that collection on the report is hurting my scores the most.

I understand the mention of collection on my credit report is destroying my chances of loan.

What is the best way to remove that collection from my report?

-should I up the offer for the collection agency?
-dispute with CRA, explaining my situation?
-straight lie on the dispute saying the driver wasn't me?
-walk into a credit repair shop?

I am willing to do anything. I am a junior engineering student, got no immediate family and desperately need this funding to continue schooling.

Please help.

 

[Borg]

I haven't had to fix credit before but, I check mine regularly. So, if I had to fix something like this, I would do the following:

Contact the three credit bureaus to find out what needs to be done to fix things on their end. Ask them what proof they need if the company refuses to notify the credit bureau that they have been paid. You will have to do this seperately for each of the three. Do not expect that anything will happen quickly or that you won't have to follow up. These things take time to fix.

Determine who actually filed the report with the credit bureau(s). Was it the collection agency or the court where the ticket was issued from? The one that filed the report has to report it as paid. But, even if they do, your credit will be screwed for some time because part of your FICO is your payment history and any history of non-payment is a killer for the numbers.

Explain the situation to the lender and hope for the best. Emphasize that you have moved a lot and that it got lost. Try to talk directly with someone in person and follow up with written correspondance if they agree to work with you.

I would not use a credit repair shop and lying about the ticket would probably make you go through more hoops than just admitting that you forgot.