What is a Pay for Delete Letter?
Say you have a delinquent account or two on your credit report, and these accounts are bringing your credit score down. You can send a pay for delete letter to the collection agency that purchased your debt. This letter requests that the account be deleted from your credit report upon being paid either in full, or for a settled amount.
It’s essentially as the name describes – debtors pay the collection agency to get the negative mark to disappear from their credit report. Once the mark is lifted, their credit score will likely rise.
Why is this a tactic some people choose to use? Even if you pay the balance in full, the negative mark still stays on your credit report until seven years from the date of delinquency have passed. Those who don’t wish to wait that long turn to pay for delete as a quicker solution.
Keep in mind that pay for delete letters generally have a much higher chance of success if you’re dealing with the collection agency – not the original creditor. So if your credit card with Chase is past due, and your balance has not been charged off yet, a pay for delete letter may not work. Generally, the lower the balance, the easier it might be to obtain a pay for delete. We offer a few alternative solutions below that might work as well.
Note that a pay for delete letter doesn’t delete your debt. You’re only asking for the account to be deleted from your credit report. Most people use pay for delete letters when they know they owe the debt, but due to unusual circumstances, were unable to pay at the time.
A good example of when to request a pay for delete is if you moved and you never received a bill due to changing addresses. You legitimately owed the balance, but you were never aware of it. This doesn’t exactly make you an irresponsible consumer, it just means there was an error along the way and an account ended up delinquent.
The same goes for owing medical debt when you thought your insurance was covering the bill because you never received a request for payment.
In both situations, you technically owe the money, but through no fault of your own, you were never notified of the debt, so you didn’t pay. Debt collectors are more likely to be understanding in such a situation. Just make sure to have proof (such as a change of address) that might help your case.
However, if your credit card balance was charged off and you simply never paid it because you didn’t have the means to, you may be less likely to get a pay for delete approved.
To see an actual example of an effective pay for delete letter, take a look at the sample letter here or this sampler letter which may help you craft your own. Note that some pay for delete letters may outright deny the debt is yours; this is not something we recommend as you shouldn’t be lying to collection agencies if you truly owe the debt.
Can a Pay for Delete Letter Help You?
A pay for delete letter won’t necessarily hurt you, but it’s not guaranteed to help you, either.
That’s because collection agencies don’t have to respond to your letter if the debt is accurate. Furthermore, if you write a pay for delete letter and only obtain a verbal agreement from the collection agency, and you pay, they may not honor your request. The negative mark could remain on your credit report. Even worse, the debt could be sold again, and a new collection agency may ask you for payment.
Unless you get a response from the collection agency in writing, you’re out of luck if the agency doesn’t make good on removing the information from your credit report. They’re not obligated in any way to agree to a pay for delete.
Before you even write a pay for delete letter, send a debt validation letter to the collection agency to ensure the information it has on file is accurate. It may not legally be allowed to collect on the debt, so it’s important to start here before offering to pay, otherwise, you risk paying the wrong company (in addition it may be beneficial to ensure your debt is not past the statue of limitations.)
If the debt is proven to be valid, and you agree that you owe the balance and want to pay it off to get it deleted from your report, you may actually have more luck calling than writing a letter.
Keep in mind that if it comes to that, you should never agree to pay anything over the phone. Always get things in writing when dealing with a debt collector. In most cases, offering to pay in full will typically result in a pay for delete agreement much more often than offering to pay less than the original amount owed.
