Question: In theory if a collection company agrees to a pay for deletion, how many points does that increase on your credit score? Can I also request that the original creditor note the account as “Paid in full” or Settled in full”. Thank you for your time and consideration in responding to this question.
Answer: You can only request the original creditor note the account paid in full or settled if you deal directly with them. A pay for delete with the collection agency ONLY deletes the collection account. It does not affect the original creditor’s notation of the account.
The longer a charge-off has been on your credit reports, the less negative effect it has on your credit score. But, if a debt buyer comes along and purchases the debt, and subsequently places the collection account on your credit report, this can have a devastating effect on your credit score. Thus, a pay for delete, with the debt collector may be in order. It still has nothing to do with the original creditor’s charge-off notation.
On the other hand, if you are successful in getting a charge-off notation changed to paid or settled by the original creditor, the debt collector can no longer report the collection account on your credit reports.
Therefore, if you want the original credit account noted as paid or settled, you must negotiate with them, not the debt collector. The article “How to get a charge-off removed” gives some strategies to deal directly with the original creditor.
As far as how much a pay for delete will increase your credit score; even in theory it would be difficult to calculate. Your credit score is calculated by many factors including the following:
- Payment History
- Amount borrowed compared to available credit
- Length of Credit History
- Hard Inquiries and New Debt
- Credit Mix
You can read more about what makes up your credit score in the article “Demystifying Credit Scores” where the 5 components are explained.
What I can offer are what actual consumers who have been successful in pay for deletes have reported about an increase in credit scores. I have read from 30 up to a 55 point increase!
For consumers looking for a boost in credit scores to qualify for better interest rates, even a 30 point boost can do the job. A pay for delete may be well worth the money. The best of luck to you.