Work with Creditors – Use Pay For Delete Letters
What is a ‘Pay For Delete’ Letter?
Let’s say you learn you have bad credit because of a negative mark on your credit report due to an unpaid debt. One of your best options is to ask a collection agency to remove the negative mark in exchange for paying some or all of the debt. This practice is called ‘Pay for Delete’ or ‘Pay for Deletion’, and it’s the best way to settle your debts.
Pay for Delete is a good option because it’s a fairly uncomplicated process – a letter is all that’s required – and it’s good for collection agencies. Collection agencies typically buy your debt for only pennies on the dollar – less than ten cents for recent debts – and if they can make 25 cents on the dollar, they’ve made money.
3 Steps to Payment For Deletion
There are three steps to having a collection agency remove your credit score using the Pay for Delete Method:
1. Find out which collection agency owns the debt. Most likely, a collection agency will contact you. If not, the credit bureau should list it on your report. Otherwise, contact the organization that originally gave you services or loaned you money; they should have a record on file.
2. Write the collection agency a letter. Think of it as a simple business deal: if you pay some or all of the debt they claim you owe them, they will remove the negative credit score from your credit report. Ask for the agreement in writing. You can find some sample letters below. Remember, these are only sample letters. It’s always best to use your own words.
3. When the credit company agrees in writing, keep the letter on file and pay the agreed amount.
If your new credit report still has the negative mark on file, you have to contact the collection agency to remind them of your bargain. In the unlikely event that doesn’t work, you should contact a lawyer or a credit repair agency.
How Does a Payment for Delete Work?
First of all, it is important to note offering to pay an outstanding debt to get a collection or judgement off your credit report, doesn’t mean you are conceding the debt is yours. A payment for deletion offer letter basically lets a collector know you are open to paying off a debt the collection agency says you owe in exchange for a signed contract indicating they will remove offending negative items such as a credit card collection or debt judgement from your credit report.
The collector is under no obligation to agree to your terms and most people will tell you it’s impossible because they don’t want to have to go through the hassle of updating their report to the credit bureaus. Collection agencies like AFNI or Alliance One, etc. only want to make money. If you stick to your guns, you will probably be able to talk to someone who will know what a Payment For Deletion (PFD) is and might be willing to work with you, especially if it means they’re going to get some money.
Keep in mind, while you’re working on the Pay for Delete process, there might be other legal deadlines to consider, such as the 30-day limit for debt validation. If this seems complicated, and it is in many cases, consider hiring a credit repair company to take the hassle out of the process.
Pay For Delete Sample Letter 1
Account Number: XXXXXXXXXXX
Original Creditor: [creditor name]
Amount as Listed on Credit Report: $XXXX.XX
To Whom It May Concern:
In reference to the above listed account, I am writing this letter to offer you the opportunity to settle the alleged amount due to our mutual benefit. Please note that I do not acknowledge any liability for this debt in any form and I retain my right to request a full and complete debt verification and validation from your company.
However, I am willing to pay off a portion of this account as a show of goodwill under the following conditions:
• your company will delete all references to this account from my credit profile at the three credit bureaus (Experian, Equifax, and TransUnion)
• you will not list this debt as a “settled account”
• your company will accept this payment to satisfy the debt in full
• your company will not attempt to sell or transfer this debt to another creditor
• you will make no mention of this agreement to outside third parties
If you agree to these terms I will:
• pay the amount of $XXX.XX via money order or certified cashier’s check (aim for around 40% to 50% of the debt for newer accounts, and 30% to 40% of the debt for older accounts)
Please understand that this is not a renewed promise to pay. This is a restricted settlement offer and you must agree to the terms above in order for payment to be made. I require your written agreement to these terms on company letterhead and signed by a representative who is authorized to enter into such agreements.
The terms of this offer will expire after 30 days. I look forward to your prompt and positive response.
[Your Name – typed not signed]
Pay For Delete Sample Letter 2
Creditor Phone Number
Account Number: XXXXX – XXXX – XX
Listed Amount Due: $X,XXX.XX
Dear Creditor Name:
In regards to the above listed account, it has been brought to my attention that you claim that I owe the listed amount due shown above. While I accept no responsibility for ownership of this debt, I’m willing to compromise and offer a significant settlement amount in exchange for your agreement to the following:
1. Your agreement to a full and complete deletion of any past-due references pertaining to this account from all credit bureaus to which you report
2. Your agreement that this payment constitutes a payment in full, and not a “paid collection” or “settled account”
3. Your agreement that you will not attempt to sell or reassign the rights to this account to another third-party debt collection agency after payment has been received
While I’m well aware that your purpose is to collect debts which you have obtained from original creditors, I am also aware that you are under no obligation to report any of these accounts to the credit bureaus.
That being said, your full cooperation in deleting this account in exchange for payment is appreciated.
When I receive signed documentation from your authorized representative on company letterhead stating that you agree to the terms above, I agree to pay $XXX.XX via certified funds – either cashier’s check or money order. This payment will be sent to you via priority mail as soon as the signed agreement is received by me.
Please be aware, that this is not a renewed to promise to pay. I make no claim of responsibility for this debt, and I make no statement that I believe that this debt is valid or owed by me.
In the event that you do not agree with the resolution terms I have offered above, I will move forward with my rights to request a full and complete verification and validation of this debt.
I look forward to a timely resolution of this matter.
Your Name (please type, do not sign any correspondence you send to a debt collector)