Keep in mind, however, that the impact of pay for delete on a consumer’s credit varies based on the borrower’s overall credit profile. The higher your score was to begin with, the more points you’re likely to lose. Missing payments can negatively impact your credit score, but an account sent to collections can result in a drop up to around 110 points. For that reason, you should request written confirmation from the collection agency that they are willing to have the account deleted before you send payment. This means that collection agencies can take your payment and still refuse to have the account removed from your credit report. Unfortunately, a pay for delete letter doesn’t carry any legal weight. The collection agency can then decide whether to remove the account as requested. When submitting a pay for delete letter, clearly state your offer to repay all or part of the debt in exchange for the collection agency removing the account from your credit report. What Is a Pay for Delete Letter?Ī borrower can initiate pay for delete by calling the collection agency or submitting a formal request letter-known as a pay for delete letter. Still, pay for delete isn’t expressly prohibited under the Fair Credit Reporting Act, so some debt collectors will offer it as an option.
For that reason, pay for delete isn’t considered totally above board and the credit reporting agencies discourage the practice. More recent accounts are more harmful to your score than older ones, so the negative impact decreases until the account disappears from the consumer’s report entirely.Ĭollection agencies are supposed to report accurate and complete information to the three major credit bureaus-Equifax, Experian and TransUnion. Accounts that are sent to collections typically stay on a consumer’s credit report for seven years from the date of first delinquency. Pay for delete is when a borrower agrees to pay off their collections account in exchange for the debt collector erasing the account from their credit report.
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