What is a ‘Pay For Delete’ Letter?
You may decide it’s better for your credit score and credit reports to just get rid of a collection account by paying in exchange for a deletion. A pay for delete letter initiates this type of transaction and can be a good fit for consumers who don’t mind paying a debt in order to have clean credit reports.
A pay for delete letter tends to work best when you make the request with a manager, VP or CEO (someone in charge). However, some collection agencies may have an internal policy to accept a pay for delete letter agreement.
‘Pay for Delete’ or ‘Pay for Deletion’ is the best way to settle your debts and clean your credit reports. Even though I’m primarily referring to a pay for delete letter in regards to collection accounts, an original creditor may also agree to a pay for delete regarding a charge-off account. It’s rare that an original creditor agrees to a pay for delete, but it doesn’t hurt to ask.
Sending a pay for deletion letter is fairly simple; it’s getting the collection agency to agree that may require a little persistence. But you may find some collection agencies very familiar and open to a pay for delete agreement.
Collection agencies typically buy your debt for only pennies on the dollar. In fact, if the debt is recent they may still only pay ten cents on the dollar for your debt. That means if they can make 25 cents on the dollar, they’ve made money.
But don’t be surprised if the collection agency requests the full amount once they know you are open to paying the debt in exchange for deletion. Hold your ground and offer less. You never know what they’ll agree to until you make the request.
Once you send your pay for delete letter and the collection agency either calls or writes you agreeing to the transaction, get the pay for delete agreement in writing before you send the money.
Steps to initiate a pay for delete letter
Step 1. Contact the collection agency in writing or over the phone to request a pay for deletion. Offering to pay an outstanding debt to get a collection off your credit report doesn’t mean you’re admitting the debt belongs to you. A payment for deletion letter simply lets the collection agency know you’re open to paying off a debt that the collection agency says you owe.
Step 2. Once the collection agency agrees to a pay for deletion, request a signed agreement stating they will remove the collection account or negative tradeline from your credit reports.
Step 3. Send the payment in the form of a cashier’s check or money order once you have the signed agreement in hand from the collection agency. NEVER give a collection agency access to your bank account.
Step 4. Monitor your credit reports for the next 30 days to verify the account has been deleted. If the collection agency has not deleted the negative information from your credit reports contact the collection agency to remind them of your agreement along with submitting a dispute with the credit bureaus. Use your signed pay for delete agreement as proof of the deletion agreement when you submit a dispute with the credit bureaus.