Get Collection Entries Deleted from your credit report:
Paid Collections Do Not Improve Credit Scores
by Lisa Phillips
Paid Collections Do Not Improve Credit Scores
by Lisa Phillips
| Copyright RebuildCreditScores 2010 All Rights Reserved |
When to Negotiate a Deletion
Before negotiating a deletion for a debt you may want to attempt debt verification with the
credit reporting agencies or debt validation with the collection agencies. If you just wish to pay
a debt then a “Pay for Deletion” may be in order. Pay for deletions can be done with original
creditors or collection agencies.
Simply put, a pay for deletion is a request made by you to the creditor or collection agency to
pay a debt in full or an agreed upon percentage in exchange for a deletion of the account or
trade-line. Some collection agencies will tell you it is illegal or that they do not do pay for
deletions. They are not being honest. Just like they put the entry on your credit, they have the
power to delete it.
If you negotiate a pay for deletion with a collection agency you may be able to settle your
debts for pennies on the dollar. See Debt Settlement for more information.
Why all Negotiations Must Be in Writing
As a rule, you should never speak to anyone at a collection agency over the telephone. All
negotiation should be done in writing and all letters mailed via certified, return receipt. You
must create a paper trail. Your correspondence is your proof is you ever have pursue a lawsuit
or small claims court matter. Also, once you get a collection agency to delete a matter, the
letter they send to you agreeing to the pay for deletion can be sent directly to the credit
bureaus to speed up the deletion process.
Payment should never be sent before you have an agreement signed by the collection agency
in your hands.
Sample Pay for Deletion Letter
Before negotiating a deletion for a debt you may want to attempt debt verification with the
credit reporting agencies or debt validation with the collection agencies. If you just wish to pay
a debt then a “Pay for Deletion” may be in order. Pay for deletions can be done with original
creditors or collection agencies.
Simply put, a pay for deletion is a request made by you to the creditor or collection agency to
pay a debt in full or an agreed upon percentage in exchange for a deletion of the account or
trade-line. Some collection agencies will tell you it is illegal or that they do not do pay for
deletions. They are not being honest. Just like they put the entry on your credit, they have the
power to delete it.
If you negotiate a pay for deletion with a collection agency you may be able to settle your
debts for pennies on the dollar. See Debt Settlement for more information.
Why all Negotiations Must Be in Writing
As a rule, you should never speak to anyone at a collection agency over the telephone. All
negotiation should be done in writing and all letters mailed via certified, return receipt. You
must create a paper trail. Your correspondence is your proof is you ever have pursue a lawsuit
or small claims court matter. Also, once you get a collection agency to delete a matter, the
letter they send to you agreeing to the pay for deletion can be sent directly to the credit
bureaus to speed up the deletion process.
Payment should never be sent before you have an agreement signed by the collection agency
in your hands.
Sample Pay for Deletion Letter
Never allow a debt collection agency fool you into believing that paying an old collection debt
will improve your credit scores. The reality is that paying an old debt will more likely lower your
credit scores than raise them. Paid collections do not increase your credit scores.
Simply paying a debt to a collection agency may bring you peace of mind and stop the
telephone calls, but it will do nothing for your credit scores. I am in no way stating you not
honor your obligations. I am; however, advocating you negotiate a total deletion of the paid
item from your credit reports in order to raise your credit scores.
will improve your credit scores. The reality is that paying an old debt will more likely lower your
credit scores than raise them. Paid collections do not increase your credit scores.
Simply paying a debt to a collection agency may bring you peace of mind and stop the
telephone calls, but it will do nothing for your credit scores. I am in no way stating you not
honor your obligations. I am; however, advocating you negotiate a total deletion of the paid
item from your credit reports in order to raise your credit scores.
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Related Topics:
Account Can Lower Your Credit
Score
As a collection account gets older,
FICO seems to give it less weight
in terms of your credit score.
Once you pay the old debt, FICO
resets the date of the last activity
to the date you paid the debt and it
is viewed as a new negative debt,
even though it is now paid. This is
one of the many problems with
FICO scoring. There is no
difference between a paid negative
item and an unpaid negative item.