A pay for delete agreement is a tool you can leverage to remove collection accounts from your credit report.
Any time you request validation from a collection agency/junk debt buyer and they respond with adequate validation, you’ll need to pay them, but you should always attempt to negotiate a pay for delete agreement with them first. This is because a fully paid collection on your credit report is not much better for your credit score than an unpaid collection–and sometimes it’s even worse, because your payment will update the account to reflect recent activity. A derogatory account with recent activity is worse in terms of credit scoring than one that has not had any activity for quite some time. A collection account will always be considered a negative item even once it’s fully paid; the fact that it was ever in collections status is what makes it derogatory!
And you can of course work out pay for delete agreements with original creditors as well.
You should always make pay for delete offers in writing, and keep in mind that you don’t have to offer to pay the full amount of the debt, especially if the debt is in the hands of a junk debt buyer (JDB). JDB’s purchase debts for literally pennies on the dollar, so they still make a huge profit even if you only pay a portion of the debt. You can also offer to pay in monthly installments rather than making a lump sum offer.
If the creditor/collector accepts your offer, make sure you have a signed agreement from them stating that they will delete the debt from your credit reports in exchange for payment. Keep a copy in case the creditor/collector fails to remove the account from your reports (in that case you’ll need to send a copy to the credit bureaus to get the item deleted).
And remember, NEVER pay a collection agency or junk debt buyer with any payment method other than a money order or cashier’s check!! They have proven time and again that they cannot be trusted with checking account or credit or debit card numbers!
I hope you found this article helpful! If you have any questions about pay for delete agreements, or other questions regarding removing collections from your credit reports, please feel free to leave a comment.