A “pay for delete” letter asks a collections agency to take the record of debt off of your credit report in exchange for payment.
It’s not acknowledging that the debt is yours, but rather, the letter simply states that the debt is on your credit report and having a negative impact. This type of letter is often used for undisputable debts.
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Downloadable Pay-for-Delete Letter Templates
A Negotiation Tool
“Pay for delete” is essentially a negotiation tool — and one that is definitely worth a try.
The reason why pay-for-delete 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% 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. Never forget to negotiate your debts.
Let’s look at a sample pay-for-delete letter, and discuss when you should send it. We’ll also provide tips on writing it.
When to Send a Pay-for-Delete Letter to the Collections Agencies
The best time to send a pay-for-delete letter is after you are notified that a collections agency has bought your debt. Before you send a pay-for-delete letter though, confirm that the debt is actually yours. You can do so by sending a debt validation letter.
You may be given the wrong debt for a number of reasons. In cases where two people have the same name, for example, the creditor could assign the debt to the wrong person.
In this scenario, you don’t need to send a pay-for-delete letter; instead, dispute the entry to remove collections from your credit report. If the debt does happen to be 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 is almost seven years old, 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.
How to Send a Pay-for-Delete 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.
If the offer is accepted, the collections agency will likely request payment within a short time frame, even just a few business days. If you fail to pay within that time, you may lose the offer.
Send your letter and payment by certified mail with a return receipt. This way you can be certain that your letters and — if the offer is accepted — payment are received. This will provide you with proof, in case things take a turn for the worst.
If Your Pay-for-Delete Letter Is Accepted
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.
Also remember to maintain a paper trail throughout the entire process. This will avoid any backtracking on the part of the collections agency.
If Your Pay-for-Delete Letter Is Rejected
The collections company does not have to negotiate. While it may be in their best interest 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.
Options Other Than Pay-for-Delete
If your pay-for-delete letter is not accepted, there are other options:
- Wait for another agency to buy your debt: You could try to wait for another collections agency to buy the debt. This might happen every six months or so, but it’s a gamble — it might not happen at all. If your debt is sold to another agency, you can try again, making a similar offer to the new debt owners.
- Wait for seven years: Another option is to just wait for 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.
- Goodwill deletion: Lastly, a paid debt may 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. Note that the late payments will still be on your report, but the paid collection will not be.
- A common use case for a goodwill deletion letter is when you’re trying to secure a mortgage or auto loan.
Wherever you are in your process, remember that pay-for-delete is not a stress-free endeavor. If you would rather have professionals do the hard work for you, consider hiring a credit repair company. 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. Need more writing tips or other letter templates? Visit our credit and collections letter template resource center.
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