Payments in collections typically remain on your credit report for seven years and have the potential to harm your credit score for a long time. Some credit repair tactics you probably get collection records taken off of your credit report early, but that’s usually only if the information is false.
If you have an , paid consideration in collections, some people might suggest asking for a pay-for-delete agreement. Nevertheless, the practice falls into a legal grey area, and more recent credit scoring algorithms render pay-for-delete less applicable.
How pay-for-delete partnerships work
A client with outstanding debts and a third-party collection company trying to recover the unpaid bill is called a “pay-for-delete” negotiation tactic.
Some collection agencies are willing to bargain, but not all may take pay-for-delete agreements into consideration. The negotiation process starts with you calling or writing to the collection company to ask for a pay-for-delete design. You agree to pay the harmony, but the collection agency may delete the paid bill from your credit report.
Some collection agencies will consent to negotiations because they only earn money when they successfully recover unpaid debts, and a pay-for-delete deal may be a means of recovering payments that might otherwise go unpaid. People didn’t deal, citing their obligation under the , Fair Credit Reporting Act , to give accurate, complete details to the credit bureaus.
If a collection agency accepts your pay-for-delete offer, it is likely to anticipate receiving payment in a relatively short amount of time. The collection agency should get in touch with the credit bureaus to request the deleted paid account after you have made the agreed-upon payment.
How pay-for-delete affects your credit
A pay-for-delete agreement’s objective is to raise your credit score. The tactic may not be as effective as it once was because of the way some more recent credit scoring systems handle collection accounts.
Pay-for-delete may improve your credit score
There are two main credit scoring platforms: FICO and VantageScore. Some FICO models take into account paid collections, so a pay-for-delete could be a factor.
FICO Score 8, the FICO score lenders most often use, can lower your score if there is a collection on your credit report, regardless of whether the account was paid. Negotiating pay-for-delete in this model can improve your credit.
Pay-for-delete may not be effective.
VantageScore ignores paid collections. That’s also true for the more recent FICO scores of 9 and 10 — FICO claims that all new models disregard all collections that have been fully reported as paid. With these models, a pay-for-delete doesn’t improve your score because there’s no penalty for having a paid collection account on your report.
Paid or unpaid medical collection debt is not included in any FICO score, which is not related to the paid or unpaid medical collection debt under$ 500. Unpaid medical bills over$ 500 still count, but they have a smaller impact on the 9 and 10 FICO Scores.
Pay-for-delete only removes the collection account
A collection company may remove the account it reported if it consents to a pay-for-delete. Despite what was said, any unfavorable information the original creditor reported is likely to remain on your report and could continue to affect your credit score.
For example, imagine you missed multiple payments on your credit card, and the issuer , charged off the account , before sending the debt to collections. The collection account could be eliminated with a pay-for-delete, but the missed payments and charge-off account would remain on your credit report for seven years.
When should you take into account a pay-for-delete agreement?
Pay-for-delete agreements fall into a legal gray area for collection agencies, and credit bureaus discourage the practice. For these reasons, not all collection agencies will take pay-for-delete offers into account. You might not like the hassle of trying to fix your credit.
That said, everyone’s credit repair journey is different, and it might make sense to ask for a pay-for-delete agreement in some cases. For instance, you might negotiate a pay-for-delete if you want to get better credit as quickly as possible so you can buy a house or apply for a , premium credit card.
Overall, your best course of action is to keep improving your credit score. Newer actions on your credit are weighed more heavily than older items. The best way to increase your credit score is to use good credit habits consistently, such as making all payments on time and increasing your  debt-to-income ratio.
How to write a letter asking for money to be deleted
To be effective, a pay-for-delete letter should clearly outline your offer to pay in exchange for the collection agency removing the account from your credit reports. Some businesses provide sample pay-for-delete letters that you can use as a template. Include the following information if you prefer to write a letter:
—Account number. Include your collection agency’s collection account number so they can locate your file quickly.
—Contact details Provide your name, address, email address and phone number so the collection agency can reach you to discuss the letter.
—Offer of payment Give the payment method and the amount you’re willing to pay to settle the account. It may be possible to negotiate to pay less than the full amount owed.
—Request the discharge of debt. Request payment from the collection agency and have the debt be removed from your credit report.
—Timeframe to respond. Give the collection agency a deadline, such as within 30 days, to respond to your offer.
Send your letter to the debt collection company that is the owner of your debt. You can find its mailing address on the debt collection letters it has sent you.
Don’t pay for a template for a pay-for-delete letter template. As long as the information is present, you don’t need to use a particular format. Paying for a template isn’t going to make it more likely for your request to be granted.
Other methods for removing credit reports from accounts
Not only is it possible to get a collection account removed from your credit report, but a pay-for-delete letter is also a good one. Depending on your situation, other options include filing a dispute with the credit bureaus, requesting a goodwill deletion or simply waiting for the account to fall off your report.
Contact the credit bureaus to complain.
Contest any errors you find on your credit report. That includes collection accounts that belong to someone else or old collection accounts still on your report after seven years.
Equifax, Experian, and TransUnion are the three credit bureaus that operate independently. You might need to report the error to each bureau and file a dispute with them. All three accept disputes by phone, by mail and through their websites.
The credit bureaus typically have 30 days to look into the issue after receiving your dispute. They’ll send you a letter outlining their decision. If your dispute is successful, the error will be removed from your report.
Request a removal of goodwill
If you’ve already paid the amount and the account is closed, think about asking for goodwill deletion. Write the collection agency a letter asking it to remove the negative mark from your credit history as a goodwill gesture. Give reasons you want the collection account to be deleted as well as the circumstances that caused the original account’s delinquancy.
Remember that a goodwill letter is a request for a favor. The collection agency is not required to help you clean up your credit file, but there’s no harm in asking.
Wait until the account stops working.
It won’t appear on your report forever if the collection account is being properly reported but the agency won’t take it down. The negative mark will disappear from your credit report when it expires.
Whether or not the debt was paid or not, collection accounts are removed from your credit report after seven years. If you don’t do something that restarts the clock, like making a payment, the seven-year clock starts with the date the original debt became due.
Bottom line
Pay-for-delete agreements are contentious, and collection agencies might not be willing to bargain. There are other ways to handle the negative credit report score. You could file a dispute with the credit bureaus if there’s an error, pay the debt and ask for a goodwill deletion or get help from a , credit repair company  , if you need help with disputing inaccurate items.
Frequently Asked Questions
Do pay-for-delete letters actually function?
Some people say they’ve had success with pay-for-delete letters, though your results will vary. Some collection agencies are hesitant to bargain for pay-for-delete contracts. Other organizations are willing to accept pay-for-delete agreements, but they may not agree to your proposals. It may take time and persistence to reach an agreement.
How can I find out which debt collection company is the owner of my debt?
Accounts that have been sent to collections may have changed hands more than once. To find out which collection agency now owns your debt, request copies of your credit reports from AnnualCreditReport.com. In your report, you’ll find a list of all collections, including the one that’s currently in charge of the debt.
Can you pay to erase your credit history?
While it’s sometimes possible to negotiate a pay-for-delete with a collection agency, it’s impossible to erase your entire credit report and start fresh. Negative things like bankruptcies, foreclosures, and missed payments will remain on your credit report until they are fixed. Some dishonest credit repair businesses falsely claim to be able to remove inaccurate data or even create new credit records for customers. Steer clear of these offers to protect yourself from credit repair scams.
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