When you talk to the HOA request that upon payment they issue you a letter stating that the account was paid in full. Once you have the letter I would suggest contacting all 3 credit bureaus with proof of paid and closed status they should be able to remove/update the negative item.
Worst case the credit reporting agencies may require you to dispute the item(s). Below are the necessary steps through Experian.
Start with a current copy of your credit report. If you don't have one, order online for immediate access. If you're reviewing your credit report online, you can access the dispute process while viewing your report. If you have a paper copy of your report, access the online dispute process and enter your report number.
You must have your Experian credit report number to request a dispute.
1.Once online, view your report section by section. Click on a particular item to see more details. If you see something that you believe is inaccurate, click on the blue Dispute this item button.
2.Select a specific reason why you feel the information is inaccurate. Enter any additional facts that further explain your reason and click on the Submit button. Be sure to read the Tell me more about dispute reasons section for tips on how to dispute credit information. Make sure you provide your email address to receive notification when the results of your investigation are ready to be viewed.
3.A notice is immediately sent to the source of the information. Generaly within 30 days, the source must verify your account data. Information verified as accurate cannot be removed from your credit report. Experian will notify you when the results of your dispute investigation are ready to be viewed and will provide you with a link to the results online. This is the fastest way to get the results.
4.If you received your credit report from a company other than Experian, ask the source for instructions on how to dispute the credit report.
I hope this information was useful.