A pay for delete letter is a useful tool to try to eliminate a delinquent credit item from your credit report. A pay for delete letter is a means used to arrange for a settlement on a severely delinquent account in which the sender is requesting that the creditor remove the delinquent record in return for paying the account off. The payoff amount can be the full amount or an offer to settle for a lesser amount.
The letter can be used in a variety of situations were the debtor wants to negotiate a payment in exchange for having the tradeline or account history being removed from their credit history. Once a delinquent record is removed, an individual’s credit score should improve almost immediately.
The object of the letter is to get the collection agency or creditor to accept payment in return for an agreement in writing that they will no longer report the debt to the credit reporting agencies.
The collection agency or the original creditor of a bad debt doesn’t have to accept or respond to a pay for delete letter but of they don’t, the individual requesting the settlement and deletion is not in any worse of a position.
The key element in charged off accounts is that a paid charge off has the same impact on a credit score as an unpaid one. Therefore, it behooves someone that has an unpaid delinquent account to try and get the creditor to remove the record in return for payment. Not all creditors will agree to remove a credit history on a delinquent account, however since the account has most likely not been paid in some time, unless the bank, credit card company or medical service provider agrees to delete, there is no incentive for the debtor to pay the account.
As a general rule, these letters are best used with the original creditor and not the collection company. Usually, the collection company cannot make the decision on behalf of the original creditor so they cannot delete the accounts from your record.
Only deal with the creditor that is reporting the debt. If a collection company is calling for debt to another company but isn’t reporting to the credit reporting agencies, ignore them and work with the original creditor instead.
Always be sure to get something in writing that says that the creditor will no longer report the debt to the credit reporting agencies and therefore get a boost in your credit score.
The following is a pay for delete letter as an examples are only that. The letter can be altered to match your specific situation.
Creditor or Collection Agency
1212 Maple St
City, State Zip
Collection Account for Original Creditor Account #
To Whom It May Concern:
This letter is to inform you that the validity of this debt is disputed. In order to compromise, I am willing to pay this account in the amount of $_____ if you agree to delete this account from any and all credit reporting agencies (Equifax, Experian and TransUnion). The purpose of this settlement is merely to have this item removed from my credit files. It is not to be construed as an acknowledgment of liability for this debt in any form.
If you agree to the terms and accept this agreement, certified funds for the settlement amount of $_____ will be sent in exchange for full deletion of all references regarding this account from my credit files and full satisfaction of the debt. Since I am sending certified funds for payment, there shall be no waiting period regarding the deletion of this account from the credit reporting agencies.
If you agree to the above terms, please prepare a letter on your company letterhead agreeing to the same terms as the above settlement offer. It will be implied that this letter shall constitute a legally binding contract, enforceable under the laws of my state.
Your response must be postmarked no later than 15 days from your receipt of this settlement offer or this offer will be withdrawn and I will request full validation of this alleged debt, as provided for by the Fair Debt Collection Practices Act.
Please address all correspondence regarding this account to:
Name
123 Any Street
City, State Zip
This letter can be used and tailored in any situation were you want to negotiate a payment for a tradeline in your credit report being removed. The mention of the term dispute in the letter is protection so as to not willing agree that the terms of the debt are in fact accurate and your full responsibility. A creditor could turn around and use any admission of the actual debt in court if they decided to take legal action.
There is no standard amount to offer the creditor to remove the debt, but there is no reason to offer the full amount initially and offer 50% of the amount owed instead.