Remove Paid Collections From Your Credit Report: Sample Pay for Delete Letters
Table of Contents
- 1 What Is a Pay for Delete Letter?
- 2 Sample Pay for Delete Letter
- 3 Downloadable Pay for Delete Letter Templates
- 4 When to Send a Pay for Delete Letter to the Collections Agencies
- 5 What If Your Pay for Delete Letter Gets Rejected?
- 6 Removing Paid Collections Accounts From Your Credit Report
- 7 Credit Repair Companies Can Help With Removing Paid Collections Accounts
What Is a Pay for Delete Letter?
A “pay for delete” letter is essentially appealing to a collections agency that, in exchange for paying part of the debt, they will take the record of the debt off of your credit report. It’s not acknowledging the debt is actually yours, but rather that it is on your credit report and having a negative impact. It’s best for a debt you can’t dispute, with the most likely scenario being that you actually owe the money. Let’s look at a sample pay for delete letter, and discuss when you should send it and tips for writing it.
Sample Pay for Delete Letter
[Your City, State Zip]
[Collector’s City, State Zip]
Re: Account Number [Insert account number]
Dear Sir or Madam:
In response to your [letter or credit report entry] on [date] related to the above-referenced debt referenced, I wish to settle the debt to our mutual benefit.
This is not an acknowledgment or acceptance of liability of the debt. I have not received verification of the debt. This is not a promise to pay and will not act as a payment agreement unless you provide a response as detailed below.
I am willing to pay [dollar amount or in full] to settle this account in return for your agreement to remove all references of this debt from my credit profile with the three credit bureaus (Transunion, Equifax, and Experian). Further, you will not list this debt as a “settled account” or “paid collection.” Should your company accept this payment, it will satisfy the debt in full, and you will not attempt to sell or transfer the debt to another creditor. Finally, you will make no mention of this agreement to any outside third parties, excluding the original creditor. I retain full rights to validate this debt.
If you agree to the terms, please send a response on your company letterhead agreeing to the terms, signed by an authorized agent of [Collector’s name]. The letter will be treated as a contract and subject to the laws of my state. In response, I will send certified payment in the amount of [dollar amount] payable to [Collector’s name] via priority mail. I realize that you are under no obligation to report these accounts to the credit bureau, but your
I look forward to working with you towards a timely resolution to this matter.
Downloadable Pay for Delete Letter Templates
When to Send a Pay for Delete Letter to the Collections Agencies
The best time to send a pay for delete letter is when you are notified that a collections agency has bought your debt.
Before you send a pay for delete letter, it may be wise to send a debt validation letter. If you don’t believe a debt on your credit report is actually yours, it may be a mistake. This can happen, for example, in cases where two people have the same name, but the creditor assigns the debt to the wrong person. In this case, you can also dispute the entry, as well. If the debt is yours, but the information is wrong, use the debt validation letter mentioned above.
It’s also important to note that, if the report of your debt has appeared for almost seven years, it might be best to wait it out. After seven years, the debt will not count against your credit score. Paid settlements, while a negative mark, won’t affect your score as much as an unsettled debt.
If, however, the debt is correct on your credit report, it’s time to go with the pay for delete letter.
The reason pay for deletion letters work is that collections agencies want money. They buy and sell debt fairly frequently (you may have received a letter from the company that acquired your debt), often for pennies on the dollar. If you offer between 50 and 60 percent of the original debt in a single payment, they will likely be inclined to take your offer. They want money, and because of how low they bought the debt for, they will see an instant profit.
Sending a Letter
The first step in sending the letter is to determine who actually owns the debt. Chances are, you received a letter or call notifying you of the debt’s new owner. Otherwise, it will be listed on your credit report.
Next, write the letter. Be sure to customize the wording, especially for your situation. When you offer a dollar amount, make sure it’s an amount you can afford to pay all at once as soon as you send off the letter. Chances are, if the offer is accepted, the collections agency will request payment within a short time frame, even just a few business days. If you fail to pay within that time, you will likely lose your chance with the offer.
Send your letter and payment by certified mail with a return receipt. This way, you can be certain your letters and, assuming the offer is accepted, payment are received. This will provide you with proof if things take a turn for the worst.
What If Your Pay for Delete Letter Gets Rejected?
The collections company does not have to negotiate. While it may be in their best interest, in order to get money quickly, they can hold out and decline your offer. A pay for delete is a request, after all. If they do not agree to your request, it’s best to pay the debt in full. As mentioned, a paid settlement looks better on your credit report than an unpaid settlement.
Or, you can try to wait for another collections agency to buy the debt. This can happen every six months or so, but it’s a gamble — it might not happen at all. If sold to another agency, you can try again, making a similar offer to the new debt owners.
Your last option is to just wait the seven years. This is the most harmful to your credit, but requires you to essentially do nothing. However, this also means not paying the debt. While you can stop third-party collectors from calling you for past-due debts with a cease and desist letter, you still owe the money. Collectors can still sue you to pay.
Removing Paid Collections Accounts From Your Credit Report
If all goes well and the collectors accept your offer, you may want to order a credit report to ensure the collector followed through. If not, send a dispute letter with your correspondence and proof of payment to the collections agency.
A paid debt can also be taken off your credit report before the seven-year mark, but it’s a bit of a longshot. You can try sending a goodwill deletion letter. You can appeal to the creditor or collections agency, asking them to remove the negative mark of a paid debt from your credit report in order to make yourself look better when trying to secure, for example, a mortgage or auto loan. Note that the late payments will still be on your report, but the paid collection will not be.
Credit Repair Companies Can Help With Removing Paid Collections Accounts
This is not a stress-free process. You have to be successful in negotiations. If you would rather have professionals do the work for you, consider hiring a credit repair company to do the hard work for you. They can keep track of the timeline, tell you if the creditor accepted your offer, and even look for other ways to help improve your credit score.
Looking for even more information on credit scores and how you might be able to improve yours? Head over to our Credit Score Resource Center for more information.
Image Source: https://depositphotos.com/
A former newspaper journalist, Cole spends his free time reading, writing, playing video games, watching movies, and learning about every subject under the sun. He lives with his wife and daughter in Idaho. Follow Cole on Twitter: @ColeMayer42
This post was updated April 10, 2018. It was originally published April 12, 2018.