Can you pay to remove negative items from your credit report?
Key takeaways
- A pay-for-delete agreement is a credit repair tactic that could help erase collection accounts from your credit report.
- It involves offering to settle your debt in exchange for the collection agency deleting the account from your credit report.
- Credit bureaus discourage the practice, and there are other ways to clean up your report.
Debts in collections typically stay on your credit report for seven years and can harm your score for as long as they appear. Some credit repair tactics can potentially get collection accounts taken off of your credit report sooner, but that’s generally only if the information is inaccurate.
Some people may recommend asking for a pay-for-delete agreement if you have an unpaid account in collections. However, the practice falls into a legal gray area, and newer credit scoring models make pay-for-deletes less relevant.
How pay-for-delete agreements work
A pay-for-delete is a negotiation tactic between a consumer with outstanding debt and the third-party collection agency trying to recover the unpaid debt.
Not all collection agencies will consider pay-for-delete agreements, but some are willing to negotiate.
The negotiation process starts with you calling or writing to the collection agency to ask for a pay-for-delete arrangement. You offer to pay the balance as long as the collection agency agrees to remove the paid account from your credit file.
Some collection agencies will agree to negotiate because they only make money when they successfully recover unpaid debt, and a pay-for-delete agreement can be a way to recover debts that might otherwise go unpaid. Others won’t negotiate, citing their responsibility under the Fair Credit Reporting Act to provide accurate, complete information to the credit bureaus.
If a collection agency accepts your pay-for-delete offer, it will likely expect the payment within a relatively short time frame. After you make the agreed-upon payment, the collection agency should contact the credit bureaus to have the paid account deleted.
How pay-for-delete affects your credit
The goal of a pay-for-delete agreement is to improve your credit score. However, the tactic may be less effective than it used to be, thanks to the way some newer credit scoring models handle collection accounts.
Pay-for-delete may improve your credit score
There are two main types of credit scoring models — FICO and VantageScore. Some FICO models consider paid collections, so a pay-for-delete could make a difference.
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. In this model, negotiating pay-for-delete can benefit your credit.
Pay-for-delete may have no impact
VantageScore ignores paid collections. That’s also the case with newer versions of the FICO model, FICO Scores 9 and 10. FICO says its new models ignore all collections reported as paid in full. 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.
No version of the FICO score considers paid medical collection debt or unpaid medical collection debt under $500. Unpaid medical debts over $500 still count, but they have less impact on FICO Scores 9 and 10.
Pay-for-delete only removes the collection account
A collection agency that agrees to a pay-for-delete can remove the account it reported. However, any negative information the original creditor reported will likely remain on your report — and can continue hurting 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. A pay-for-delete could remove the collection account, but the missed payments and charge-off account would stay on your credit report for seven years.
When to consider 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 those reasons, not all collection agencies will consider pay-for-delete offers. You might find this credit repair tactic isn’t worth the hassle.
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 example, you might negotiate a pay-for-delete if you want to improve your credit score 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 continue building your credit score. Newer actions on your credit are weighed more heavily than older items. The best way to raise your credit score is to consistently use good credit practices like making all payments on time and improve your debt-to-income ratio.
How to write a pay-for-delete letter
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 companies offer sample pay-for-delete letters you can use as a template. If you prefer to write a letter, include the following information:
- Account number: Include the collections account number to help the agency quickly find your file.
- Contact information: Provide your name, address, email address and phone number so the collection agency can reach you to discuss the letter.
- Payment offer: State the amount you’re willing to pay to settle the account and the payment method. It may be possible to negotiate to pay less than the full amount owed.
- Request debt removal: Request that the collection agency delete the debt from your credit report in exchange for payment.
- Timeframe to respond: Give the collection agency a deadline to respond to your offer, such as within 30 days.
Mail your letter to the collection agency that owns 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. You don’t need to use a particular format as long as the information is there. Paying for a template isn’t going to make it more likely for your request to be granted.
Other ways to remove accounts from your credit report
A pay-for-delete letter is not the only way to get a collection account removed from your credit report. 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.
File a dispute with the credit bureaus
If you see things on your credit report that are inaccurate, dispute them. That includes collection accounts that belong to someone else or old collection accounts still on your report after seven years.
The three credit bureaus — Equifax, Experian and TransUnion — work independently. You may need to file a dispute with each bureau reporting the error. All three accept disputes by phone, by mail and through their websites.
After receiving your dispute, the credit bureaus typically have 30 days to investigate the issue. They’ll send a letter informing you of their decision. If your dispute is successful, the error will be removed from your report.
Ask for a goodwill deletion
Consider asking for a goodwill deletion if you already paid the collection account. Write the collection agency a letter asking to remove the negative mark from your credit history as a goodwill gesture. Explain the circumstances that led to the original account delinquency and why you want the collection account removed.
Remember, 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 falls off
If the collection account is being accurately reported, and the agency will not remove it, it won’t stay on your report forever. The negative mark will disappear from your credit report when it expires.
Collection accounts are removed from your credit report after seven years, whether the debt was paid or not. The seven-year clock starts from the date the original debt became delinquent unless you do something that restarts the clock such as making a payment.
The bottom line
A pay-for-delete arrangement is a negotiation between you and the collection agency trying to recover an unpaid debt. In exchange for paying some or all of the outstanding debt, the collection agency agrees to delete the account from your credit report.
Pay-for-delete agreements are controversial, and collection agencies may not be willing to negotiate. There are other ways to deal with the negative mark on your credit report. 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 accurate items.
Frequently asked questions
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