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Who should get a Pay for Deletion Offer

A pay for delete offer can get a negative mark removed from your credit report, but who should you send it to, the creditor or debt collector?

Question: Hello I just found your pay for deletion sample letter and I plan to use it for two accounts of my credit report. My question is do I address it to the Original Creditor and settle with them or with the collection agency. I also planned to offer the full amount is exchange for the deletion because the debt is not beyond my current means and I just want it removed will this help my case? Thank you so much for your time and advice it is priceless to me.

Answer: First, I want to make sure you understand that “pay for deletion” sample letter is typically used with a collection agency, not the original creditor. You probably already know this but I just want to reiterate when doing a pay for deletion with a collection agency, it will not remove the original creditor’s negative notation on your credit report. The reason being is if the original creditor has “charged off” the debt there is no legal standing which says they must remove the negative notation.

Pay for Delete with Original Creditor

It will not hurt to start your negotiations with the original creditor. Just keep in mind it may take some convincing for the original creditor to deal with you after a charge-off has ensued. You want to somehow convince the original creditor to remove the charge-off from your credit report in exchange for payment.

Since you are willing to pay the entire amount, they may agree. And, if you can offer immediate full payment once you get the agreement in writing and signed by the original creditor, your chances may improve.

Make sure you send the offer to someone in upper management with the authority to remove the charge-off from your credit reports. You don’t want the agreement in the hands of a representative who has no authority to make those types of decisions.

Explain to the original creditor you would like to make full payment in exchange for having the charge-off status removed from your credit report. Keep the conversation polite, professional and to the point. If you are successful in making a pay for delete agreement, they may have an agreement on company letterhead or you can send your own agreement via certified mail with return receipt requested. Request the creditor sign and return a copy to you.

Keep in mind the original creditor may agree to delete but that does not guarantee a deletion if a collection agency is involved. Make part of your agreement that the original creditor will contact the debt collector on your behalf and request them to delete also. The only requirement of the original creditor, if they accept payment, is to notify their debt collector that the debt is satisfied and the debt collector must then update their reporting to paid and $0 balance. The debt collector can choose to continue reporting as long as it is accurate reporting. Just make sure you request the original creditor to instruct the debt collector to delete their reporting.

Pay for Delete with Collection Agency

On the other hand, a the collection agency may be more than happy to take full payment in exchange for a deletion. There are no laws that require a debt collector to remove a collection account from credit reports in exchange for payment but some of them will. In fact, to the contrary, credit reporting agencies reporting guidelines clearly instruct all furnishers of information that they are not to delete prior, accurate reporting based on payment of the debt. However, a lot of debt collectors just want the money and they will agree to delete.

A pay for deletion with the collection agency will not remove the original creditor’s negative mark on your credit reports. Keep that in mind as you may want to tackle the original creditor’s charge-off negative mark through the dispute process once you are able to get the collection account removed.

The good news is that the older a charge-off, the less negative effect it has on your credit score. Letting it age off your credit report may make sense if you are near the  end of the 7-year reporting period.  The best of luck to you.

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