"Pay for Delete" and Fix Your Credit Report
March 3
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pay for delete by Pete Low

If you've got a past-due loan on your credit report, try to negotiate a "pay for delete" deal. Many collection agencies will agree, and it's a pretty cool way to raise your credit score quickly, while getting rid of an old debt.

If a collection agency bought the debt, you can negotiate with them. If they're just working for the original lender, you can try negotiating with the original lender, since they're the ones who'll have the authority to delete the tradeline from your credit report.

Figure Out How Much You Can Pay

Scrape up some money with a debt consolidation loan or sell something on eBay or use your tax refund, and figure how much you can offer as a lump sum on the debt.

If a collection agency bought a large debt, into the thousands of dollars, remember that they probably only paid a few pennies on the dollar, so anything they receive will be profit to them. Sure, they'd like the whole amount, but you probably can't afford to pay it and they'd be shocked to get it.

If the debt is only a couple hundred dollars, they might expect full payment or close to it, but if the debt is more than that, start out offering maybe 25% of it.

If everything goes right, you'll be done with the debt, and they'll delete anything bad about it from your credit report, as if it never happened.

This is a negotiation, though, so nothing's guaranteed. I'm not a lawyer, so if you have any legal questions about this, be sure to ask one. Success depends on how greedy they are and whether they think they can get more money out of you. On your end, it depends on how much you want your credit cleaned up. A small, old debt of less than a couple hundred dollars may be doing way more harm than it's worth on your credit report, and might be worth paying in full (maybe minus extra charges and fees) if that's the only way they'll agree to delete it. A debt of a few thousand dollars is a different matter, and you may want to try to hold firm with a lower settlement amount, even if you can only get it marked "paid in full" or "settled."

Here's How to Go for a "Pay to Delete" Deal

Get the address of the collection agency or the original lender, whichever still owns the debt, from a letter they've sent you or ask when they call, and send a certified letter, return receipt requested. Don't send them any money yet. Here's a sample you could use. There's no particular wording that's necessary, as long as you get the basic ideas across.

(Your name, address, contact info, account number, etc.)

This letter is in reference to (whatever debt it is). I would like to pay $XX to settle this debt in full, if you agree to the following. I am not acknowledging that I owe this debt, but would like to save both of us further time and effort with this payment.

I will pay $XX if you agree to remove all information about this debt from all the credit reporting agencies within ten days after receipt of my payment and to make no further report of it to anyone except the original creditor. I understand that your company can change the way this debt is listed with the credit bureaus, since you are the information furnisher.

If you agree, please acknowledge your agreement on your company letterhead, signed by an authorized agent, and that will constitute a contract subject to the laws of my state.

If I don't receive a response within 14 days, I will withdraw this offer and dispute this debt under the Fair Debt Collection Practices Act.


(Sign it, and make sure all your contact information is on there. For once, you want to make sure a debt collector can contact you.)

If they write or fax you back and agree, you're all set. If they call, ask them to put it in writing, and wait until you get it in writing to send the money. Mail a cashier's check or money order by certified mail. After they've had time to remove the item, check your credit report and if it's not removed, dispute it with the credit reporting bureau, and it should disappear.

If They Don't Agree

Well, that sucks. But they don't have to. You may just be out of luck.

If you want, call them and try to negotiate over the phone. The game you need to play is not to agree that you owe the debt. Act like you're doing them a favor paying it, or paying part of it, just to get this over and done with. You want them to think that suing you would be a big headache and it would be easier for them to accept what you're offering. Even if they say they don't remove items from credit reports, they probably do for the right amount of money.

If you get lucky and they agree to something, wait for them to fax or mail it in writing before sending the money.

One thing that won't work is sending them a check with some special clause on the back, like "by endorsing this, you agree this debt is paid in full," or "you agree to delete this from my credit report" or whatever. They can just cross it out and endorse the check anyway, or even if they don't, it won't hold up in court as a contract. They're not receiving anything in exchange for agreeing to delete it, because legally you owe them anyway, and for it to be a contract, they'd need to be getting something extra.

Or If It's a Small Debt, Try This, Which is Kind of Sneaky

If it's a small debt and you can't get them to agree to a "pay for delete" even for the full amount, pay it all off anyway, then dispute it with the credit reporting agencies. The collection agency has made their profit now and can't demand any more money out of you, so the last thing they want to do is cut into their profit by spending more time and effort justifying this debt to Experian or whoever. So they probably won't reply to the dispute, and when the credit agency doesn't hear back, they'll remove it from your report. Which is what you wanted in the first place.

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7:52 p.m. March 3
The whole idea of "pay for delete" seems illegal or at least unethical. It's asking a company to lie on your credit report.


8:12 p.m. March3
If you don't like it, don't do it. If you see all the lies that collection agencies and credit bureaus try, this isn't even close. Anybody who makes the effort to step up and pay a past bill ought to be rewarded for their honesty in paying as much as they can, not be slapped with a mark on their credit forever.


10:50 p.m. March 3
What are the odds of this actually working


11:49 p.m. March3
It depends. Some people have success, some companies just won't budge. It really depends on a lot of factors, how desperate they want the money, how easy they think they could win a lawsuit and collect a judgment, what their standard policy is, what they ate for lunch that day, who knows. I know one fellow who paid $250 on a thousand dollar credit card bill that was past due about a year and they were happy to get it and delete. Then, another woman told me she tried it for a $125 bill from some old phone company, and they wouldn't agree to change anything on her credit report.


5:01 p.m. March 4
Isn't it illegal to dispute a credit report item that U know is accurate?


6:59 p.m. March 4
I'm not answering that. I don't give legal advice. Is there a lawyer in the house? Seriously, answering not as a lawyer and not giving legal advice, seems like it's a judgment call. At worst it could be considered a frivolous dispute, which they don't have to respond to. But it's not like they're going to haul you off to jail for disputing, and it's an old bill that you potentially may have lost the records for and actually might not believe you owe.

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