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’.
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. Here are some sample letters:
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 score 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 Deletion 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 Property Solutions, 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.