The Fair Credit Reporting Act gives consumers the right to dispute errors on their credit report, but what about when the negative information is accurate? You'll have to take a different approach. Requesting a pay for delete may help you clean up credit mistakes and start improving your credit score.
What Is Pay for Delete?
Pay for delete is a negotiation strategy you can use to have negative information removed from your credit report. The pay for delete letter is ideal for debts that can't be disputed with the credit bureaus because you actually owe them.
Here's a sample pay for delete letter you can use to request a creditor remove an account from your credit report in exchange for payment.
To request a paid account be removed from your credit report, use a goodwill deletion request letter instead.
Sample Pay for Delete Letter
Here's a sample pay for delete letter can be used to cleanup your credit report. Replace the bold items with your specific, personal account information. It will also be helpful to reword the letter to make it specific to your situation. Download the letter template (compatible with Google Docs and Word), or retype the text below into the software of your choice.
Sample Pay for Delete Letter (Text Version)
Your Address Your City, State Zip
Collector’s City, State Zip
Re: Account Number XXXX-XXXX-XXXX-XXXX
Dear Collection Manager:
This letter is in response to your [letter / call / credit report entry] on [date] related to the debt referenced above. I wish to save us both some time and effort by settling this debt.
Please be aware that this is not an acknowledgment or acceptance of the debt, as I have not received any verification of the debt. Nor is this a promise to pay and is not a payment agreement unless you provide a response as detailed below.
I am aware that your company has the ability to report this debt to the credit bureaus as you deem necessary. Furthermore, you have the ability to change the listing since you are the information furnisher.
I am willing to pay [this debt in full / $XXX as settlement for this debt] in return for your agreement to remove all information regarding this debt from the credit reporting agencies within ten calendar days of payment. If you agree to the terms, I will send certified payment in the amount of $XXX payable to [Collection Agency] in exchange to have all information related to this debt removed from all of my credit files.
If you accept this offer, you also agree not to discuss the offer with any third party, excluding the original creditor. If you accept the offer, please prepare a letter on your company letterhead agreeing to the terms. This letter should be signed by an authorized agent of [Collection Agency]. The letter will be treated as a contract and subject to the laws of my state.
As granted by the Fair Debt Collection Practices Act, I have the right to dispute this alleged debt. If I do not receive your postmarked response within 15 days, I will withdraw the offer and request full verification of this debt.
Please forward your agreement to the address listed above.
Tips for Sending Your Pay for Delete Letter
- Before you make a pay for delete offer on a collection account, make sure it's your debt and the debt collector has the right to collect on it. You can request verification of a debt by sending a debt validation letter, if your initial contact with the collector was within 30 days ago. A debt collector who cannot verify your debt with sufficient proof cannot collect from you, that includes listing the debt on your credit report. However, if the debt collector does have and provides you with proof, collection activity can resume.
- It may be better to simply wait until the credit reporting time limit has expired for debts that are close to the seven year mark. Once the item automatically falls off your credit report it won't impact your credit score.
- Send the pay for delete letter only if you can pay the full amount once your offer is accepted. You may only have a certain time to pay before the offer is rescinded and collection actions resume.
- Send the letter and your follow-up payment via certified mail with return receipt requested. This gives you proof that the letter and your payment were mailed and received.
- Make sure you keep a copy of the letter for your records or in case you want to try the strategy with a different creditor or collector.
What If the Pay for Delete Offer Is Rejected?
Unfortunately, there is no guarantee the pay for delete offer will be accepted. The pay for delete offer is simply a request.
While your offer to pay the account in full is sometimes incentive for the creditor/collector to update your credit report, the creditor/collector is not obligated to accept your offer.
If your offer is rejected, you can:
- Pay in full anyway; a zero balance is better than an outstanding balance.
- Settle the account for less than the full balance due; you'll have to make a settlement offer and have it accepted by the creditor or collector.
- Wait until the account is moved to another collector (this often happens every six months, but sometimes not at all) and make a new pay for delete or settlement offer.
- Pay nothing and wait until the credit reporting limit expires and the item falls off your credit report. Note that collection efforts will continue (you can stop third-party collector calls with a cease and desist letter) and you may be sued for the debt.
Frequently Asked Questions (FAQs)
What is the statute of limitations on debt collections?
Debt doesn't expire until it is paid in full. That means there's no limit on how long collection actions can take place. There is a limit to how long you can be sued for debt, however. This is the statute of limitations and it varies by state. In general, it ranges from three to six years. If you're sued for a debt that may be outside the statute of limitations in your state, the best course of action is to consult an attorney for assistance.
How do you find out which collection agency has your debt?
You have a few options to find out which collection agency owns your debt. You could ask your original creditor, but that information may not be accurate if it's been sold multiple times. You can also get a free copy of your credit report and see how it's listed there. The information could be out-of-date, though, especially if you're debt has recently been purchased. Many collection agencies call, so you could also check your voicemail or unknown phone numbers that have called.