It is not easy to be in collections and can be very detrimental to your credit history. Perhaps, some of you heard that it is possible to talk to collections agencies and make a payment that will result in their deletion of the debt on your credit report. This is called a ‘pay for delete’. But even starting with collections to get them to accept a pay-for-delete is challenging.
Here's what you need to know:
A pay-for-delete agreement refers to a legal contract whereby an individual or a company agrees to delete certain information they have posted on the internet in exchange for compensation.
Pay for Delete agreement is when a collections agency, to get paid, promises to delete the negative item off your credit report once you pay off the debt. This means that after obtaining a credit repair, you have a chance to start fresh as if the delinquent account was never opened.
It is better to have a paid collection account than an unpaid one, for example. However, to delete it completely through a pay-for-delete improves your credit profile much more than the collections record does. It can improve it as the negative mark is no longer dragging it down, thus, it can bump up your credit score.
Why Collections Agencies Are Reluctant
Collections agencies are usually reluctant to accept pay-for-delete deals for a couple of reasons:
1. Erasing accurate credit details is unlawful under the Fair Credit Reporting Act (FCRA). The FCRA has a legal mandate that ensures that credit reporting agencies report accurate information. If a debt collector agrees to remove consumer report information of a paid collection that was factual, it acts contrary to the FCRA requirements.
2. The case appears to be a precursor for future pay for delete requests. The pay-for-delete effect also means that if a collector allows one consumer to have the pay-for-delete request, other consumers will also want the same. This can encourage mass deletions which distort the credit reports and their accuracy levels.
Accepting pay for deletes means they have to bend the rules of collecting agencies where they are legally bound to keep records. So most refuse to reduce the risk of being dragged to court in the future for repercussions on their actions.
Techniques for Ensuring Collections Consent
Despite this, it doesn’t hurt to attempt a pay-for-delete as they may just agree once in a blue moon. Here are some tips:
Start negotiation early. This leverage is lost once the account is sold to several collection agencies. The payment and deletion letter should be sent to the client at the same time. It aids in avoiding a situation where the agency receives your money and then fails to erase as they agreed to do.
Get promises in writing. Verbal agreements mean nothing. The deletion deal has to be in some written, legally binding form that has to be provided in a specified format.
Cite financial hardship. The inability to provide full payment indicates one lost his/her job or had to pay medical bills making it impossible to repay. Take advantage of sympathy cards whenever possible.
When a collector has gone over your head you will need to find a new approach by speaking with a different supervisor. If frontline agents reject the request, respond, politely, that the matter will be handled with a manager. Supervisors, on the other hand, have more leeway to make exemptions.
Order professional help from a reputable credit repair service. They could have better results negotiating pay for deletes than the current strategy that you are adopting. Just beware of scams.
What to Do When They Turn Down
Probably, collections will not agree to this kind of agreement and deny the payment for deletion. When they do, it is not the end of the world as some people might want to make you believe. Consider these additional tips:
- Do not pursue it to court, though, rather seek a compromise. Propose payment for the amount in full at a rate of 60-80 percent. This looks better than keeping it unpaid, yes this looks much better.
- Dispute reporting errors. Also, make sure you verify that you truly owe the debt as well as whether statutes of limitations have run out on the debt.
- They need to write a goodwill letter. Bring back the tears and emotional appeals again to request a withdrawal as a courtesy.
The Bottom Line
However, some consumer figures are constant, and they are capable of having the collection deleted through forceful pay-for-delete contracts. More often though, collectors remain uncompromising as per the credit laws that have been put in place.
In the case that you find yourself in a situation where you have exhausted every effort in making the pay-for-delete deal work but it does not then you do not have to worry. In general, the best ways to minimize collections damage are as follows: Disputed errors, where customers’ accounts are credited or debited in error, should be resolved so that the credit bureau does not receive notice of the error; Balances that are being paid off over time help reduce the impact to the credit bureau; Credit rehabilitation implies that an effort is made to improve the credit history of those who have been given credit; Lastly, time is always Maintaining positive credit remains crucial, although the negative mark may lessen in severity with time.
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