Pay for DeleteCredit Repair Definition
An arrangement where a collection agency agrees to remove a negative entry from your credit report in exchange for payment of the debt.
Definition
Pay for delete is an arrangement where a consumer negotiates with a collection agency to have a collection account removed from their credit reports in exchange for payment of the debt (often including a settlement for less than the full amount). While widely discussed as a credit repair strategy, pay for delete is not guaranteed or legally required; collection agencies are permitted to report accurate information to credit bureaus for up to seven years. Many major collection agencies have policies against such arrangements because they may violate their agreements with credit bureaus to report accurate information. However, some smaller collection agencies may agree to pay for delete, typically verbally or through carefully worded letters rather than explicit agreements. Even when successful, pay for delete only removes the collection account entry, not the original delinquency reported by the original creditor.
Frequently Asked Questions
Are pay for delete arrangements legal?
Pay for delete arrangements aren't illegal, but they exist in a gray area. The Fair Credit Reporting Act allows the reporting of accurate information for up to seven years, and collection agencies have agreements with credit bureaus to report complete and accurate information. Removing a legitimate collection account could be considered a violation of these agreements. However, there's no specific law prohibiting a collection agency from removing accurate information if they choose to do so. The consumer isn't breaking any laws by requesting such an arrangement.
How do I negotiate a pay for delete agreement?
To negotiate pay for delete: (1) Contact the collection agency by phone to gauge their willingness to consider such an arrangement; (2) If they seem open to it, submit a written offer proposing payment (often less than the full amount) in exchange for complete deletion from all credit reports; (3) Include a specific timeline for removal (typically 30 days); (4) Request written confirmation of the agreement before sending payment; (5) Send payment by certified mail or another traceable method; and (6) Check your credit reports after the agreed timeframe to confirm removal. Be prepared for the agency to refuse your request, as many have policies against pay for delete.
Will paying a collection account improve my credit score if it's not deleted?
The impact of paying a collection without deletion varies by credit scoring model. Older FICO models (which many lenders still use) treat paid and unpaid collections similarly, so paying without deletion may not improve your score significantly. However, newer models like FICO 9 and VantageScore 3.0 and 4.0 ignore paid collections completely, meaning payment would improve your score even without deletion. Additionally, some lenders manually review credit reports and may view paid collections more favorably than unpaid ones when making lending decisions, even if their automated scoring model doesn't differentiate.
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