Can Paying For Deletions Help Your Credit Score?


Did you know that one of the easiest ways to clean up your credit is to pay to have collections deleted from your credit report? It’s actually possible, credit collection companies do have the power to remove a negative entry from your credit report, but that information comes with some caveats. For instance, it’s a method for improving your credit score that will only work with certain collection agencies. Also, it’s important to understand that this technique will not work for all debts. In actual practice, this method of credit repair is best used for debts of $500 or less, such as a delinquent cable TV or utility bill.

How Pay For Delete Works

If you’ve never used Pay-for-Delete, it’s a fairly easy process to understand. You are essentially paying your creditor the entire amount you owe them, and they remove the negative entry about the account that was sent into collections from your credit report. As stated before, this method is best used for debts of around $500.00.

If you owe more than that, it’s recommended to offer to pay a maximum of 25% of what you owe. However, no matter what amount you owe, it’s important to remember this technique may not work with all collection agencies. If your debt has been sold to one of the larger credit collection agencies, you probably will not be able to get the negative collection entry removed from your credit report, even if you pay your delinquent debt off completely. This method may work with smaller collection agencies, so-called “mom and pop” operations, but you can’t count on it.

When an overdue debt is sold off to a collection agency, they often pay only pennies on the dollar for the right to collect that debt. What a collection agency pays for an overdue debt will depend on the kind of account it is, and how old the debt is. Say you’ve got an old credit card debt in the amount of $2,000. The collection agency probably paid less than 3 cents on the dollar, or $60 to purchase your old debt. So, when you approach them to try to settle the debt, offer them 25% of the total, or $500. That will give the collection agency a clear profit of $440, with no effort on their part, since you’re the one approaching them with the offer of a cash settlement.

Since the original debtor, the credit card company has written off your debt, this entire amount goes to the collection agency. In all likelihood, they will go for it, and mark your debt settled, if not paid in full. However, this is not pay-for-delete, as the account will still remain. The art of negotiation comes into play as you ask for the account to be removed.

The more you pay towards your debt, the higher the likelihood that they will agree to remove the account completely from your credit report, though they will tell you at first that this is not possible. However, it’s worth a try; if they don’t remove it, you’ve still gotten a bargain in your debt settlement. A settled or paid-off debt looks better than an open, outstanding debt on your credit report.

Scott Smith, president of says, “We always encourage the consumers we work with to pay the valid outstanding debts they owe. If there is a negative item attached to a tradeline, and the consumer has paid the debt in full, we have seen that often the credit furnisher is more open to work with the consumer on rectifying those issues.”

If A Debt Is Already Delinquent, Why Bother With Pay-for-Delete?

Even you’ve mismanaged your finances enough that one of your accounts went into collections there are distinct advantages to getting delinquent debts removed from your credit history. If you can improve your score enough to get it into the acceptable range, it can create huge advantages for you going into the future. For instance, if you’re planning to apply for a loan, or to get a new credit card, an improved credit score can save you hundreds, maybe even thousands of dollars because you’ll be getting lower interest charges. Whatever the outcome to your credit score, it’s certainly worth trying to get a negative entry removed from your credit score.

Some Methods Worth Trying

For anyone with a collection marring his or her credit reports, and a strong desire to make it go away, here are a few suggestions that may make this a reality.

  • Try contacting your original creditor to learn the status of your debt. If your debt has been sent to a credit collection agency on a contingency basis, that means the original creditor still owns that debt, and the collection agency will get to keep a percentage of any money it collects. Try asking the original creditor if they’d be willing to take the account back so that you can pay them directly. This method is most likely to succeed if your debt is a medical debt, an unpaid utility bill, or a cellphone bill. Getting a debt taken out of collections will cause it to be removed from your credit report.
  • Contact the collection agency by phone. This is preferable to sending a Pay-for-Delete letter since some are written to deny that the debt is yours. Debt collectors are used to being treated with hostility, so that when you contact them with a reasonable-sounding phone call offering to settle the debt if the collection agency will remove the collection from your credit report, you’re more likely to meet with success. This is one time when it’s best to go with a soft touch. People who try this with an aggressive attitude will probably fail to get what they want.
  • Get everything in writing. If you can convince a credit collection agency to delete a collection from your credit report through calling them. Be sure to get everything in writing before paying them anything. If the collector won’t send out a letter of agreement, then at least get an e-mail so that you have some proof that they have agreed to delete the negative information.
Posted in Credit 101
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