I’m a layman, not a lawyer. Legal information is not legal advice.
A lot of people won’t tell you this, but you can get legitimate collection items deleted from your credit report entirely with some negotiating skills and a lot of tenacity. Specifics vary greatly from one situation to the next, but, in general, you as the consumer end up paying all or most of a delinquent collection account, and in exchange the collection agency agrees to remove the offending item from your credit report.
For a long time, it was considered good form to negotiate for a specific account closure code such as “paid in full” on your credit report. However, it is now well known that the account closure code on your credit report has no impact on your credit score. In fairness, the specifics of how FICO credit scores are computed are not publicly known, so there has been a lot of “reverse engineering” that has gone on over the years by credit experts and consumers alike.
Contrary to extremely popular misconception, paying off delinquencies does nothing for your credit score. Bill collectors would love you to believe that paying them “may help your credit score.” This is just a dishonest tactic debt collectors use to get consumers to pay up; they know damned well it won’t help your score.
On the flip, side a few “credit gurus” have led consumers to believe they can force a debt collector to accept payment for account deletion. This is also a lie meant to drive up sales. You can in no way force a debt collector to agree to accept your payment contingent deletion of the account from your credit report. The “pay for delete” approach requires the consent of the debt collector in order to work.
In order to get a collection agency to agree to delete an item from your credit report, you need to be prepared for certain lies you’ll be told along the way. Debt collectors don’t like to agree to payment contingent deletion because it can legitimately be a pain for them to go through the process to get something deleted. Don’t be dissuaded push until you get what you want or it’s clear you can’t push the debt collector any further.
Five Lies Every Debt Collector Will Tell You About “Pay for Delete” Requests
We Don’t Delete Items From Credit Reports.
Why is this a lie?
The Fair Credit Reporting Act (FCRA) requires that debt collectors delete inaccurate information from credit reports. These inaccuracies can be the result of fraud or just a simple mistake. Nonetheless, at the end of the day, all debt collectors have the capability to delete information from credit reports.
Collection agencies may or may not chose to use their ability to delete items from credit reports in every case, but that’s completely different from telling consumers “we don’t do that.”
Often, when you hear a debt collector say “we don’t do that” in response to a pay for deletion request, what they’re really saying is “my job isn’t worth a warm bucket of piss — I don’t have the authority to do what you’re asking.”
When you get that response over the phone or in writing, it just means you need to be persistent and escalate your request up one level to someone more senior than the person you’re talking to. You may need to escalate your request several times to higher and higher level managers to have a fair chance of getting your pay for delete request actually considered.
The Credit Bureaus Won’t Let Us Delete Items From Credit Reports
Why is this a lie?
This is a lie for the same reason as the first case. Credit bureaus are required to have the ability to delete errant entries on credit reports. Therefore, they have the ability to selectively remove information from credit reports upon proper request.
This is just a case of a debt collector “shifting blame” from themselves to a third party. It’s an optics game: if they can make it look like the bureau will never approve the request even if the debt collector agrees, they can make you go away.
As an added bonus, the bureaus look like “the bad guys” and the collector might be able to reframe the conversation to look like they’re trying to “help” you.
We Can’t Do That, It’s Illegal Under the Fair Credit Reporting Act (FCRA) Or Some Other Law
Why it’s a lie:
Let me be clear: bullshit! Follow the bouncing ball…
- Reporting information to credit bureaus is entirely voluntary. There is no law that says you must report credit activity to the credit bureaus.
- The Fair Credit Reporting Act (FCRA) only requires that information that is actually reported be accurate.
- Not reporting an item is, at its essence, an act of silence on a credit matter. Remaining silent is never the same as lying.
- Deletion of an existing item in the credit bureaus’ databases is basically you and the debt collector agreeing to remain silent after the fact.
This is just the debt collector “shifting the blame” to the law to get you to back down. Obviously, most people don’t want to go around violating the law or enticing others to do so along with them. So this is a very effective way to shut down the conversation along the lines of a “pay for delete request.”
Just call the collector on their lie or express skepticism that what they’re saying is accurate and push for another level of escalation.
Because debt collectors want consumers to believe this lie so badly, they push it hard and they push it often. Consumers repeat what they’ve been told by debt collectors and debt collectors have PR firms that print things that make “pay for delete” sound shady and/or somehow technically illegal, when on the face of it, it isn’t.
Don’t Waste Your Time Calling The Original Creditor: You Have To Pay Us
Why is this a lie?
If your account has been in collections for less than a year, there is a good chance that you can reach out to the original creditor and ask them if they’ll accept your payment — provided they pull the account back from collections. Typically, at this stage the collector still “owns” the debt, even if they’ve charged it off for accounting purposes.
Debt collectors will — of course — lie to you, because if the original creditor works with you, they likely won’t get paid. So it’s in their financial best interest to lie in this manner, but it’s still unethical.
For medical collections, this can often work for years after the account has gone delinquent. Why? Because medical billing is complex, needlessly complex, and everybody knows it — especially those working in medical billing. So, it’s very easy to believe that some portion of a larger bill escaped your notice or you weren’t properly billed in the first place. Absolutely be willing to contact the original medical service provider and see what they’re willing to do; the results can be surprising.
Unfortunately, this isn’t always a lie. As a debt ages, it is increasingly likely that the original creditor has sold off the rights to the account to a debt buyer. Once a debt buyer has taken over the account, they now “own” the delinquent account as a non-performing asset as if they were the original creditor.
If you call the original creditor and they won’t work with you, it’s a good bet that the debt has been sold to a debt buyer.
Sure, We’ll Agree To Your Pay For Delete Request — But Don’t Expect Anything In Writing
Why is this a lie?
This is an age old tactic by collection agents to basically say anything to get a consumer to pay up. Once the consumer has paid, they have little recourse with respect to anything verbally “agreed to” by the debt collector.
Anytime someone says they’ll agree to something, just not in writing, you can be certain they’re lying to you!
If Debt Collectors Can Honor A Pay For Delete Request, Why All The Pushback?
There are lots of reasons that debt collectors push back on this one, but in general they boil down to two simple reasons: it takes some extra work, which has an associated labor cost, and sometimes there is political blowback from account managers at the big three who discourage the practice.
So, yes, money and office politics mingled with a little bit of laziness. Surprised? Don’t be.
It’s worth noting that there are some factors that can influence the collector’s willingness to agree to accept payment contingent deletion:
Your size matters, or rather the size of your debt does. If your debt amount is small, the amount of extra work required to get the deletion to go through might not be worth it to the collector. The labor cost associated with the deletion might be too high — resulting in a net loss on their part if they agree to go through the deletion process.
The larger your debt, the more likely the the debt collector is going to be willing to accept both a reduced payment amount and agree to accept payment contingent deletion.
There are no hard numbers, but here are some good rules of thumb:
- If the debt amount is less than $100, you’re probably wasting your time trying to get the collection agency to agree to a pay for delete letter.
- If the debt is more than that but $500 or less, you’ll likely end up paying the full amount or something close, like 80%.
- If the debt amount is over $500, there is a good chance you can negotiate the debt amount. Start at 20% of the debt amount and work your way up: chances are you’ll end up agreeing to 40 — 60% of the debt amount, which is still a good deal.
Their size matters, too. As a rule of thumb, larger debt collectors are going to be much less willing to agree to a pay for delete request. This seems counterintuitive, because you’d think that, with the scale of their operations, it would cost less for them to perform a deletion upon request and they would be better connected politically with the credit bureaus.
Counterintuitively, the opposite is true: smaller debt collectors are much more willing to agree to “pay for delete,” because they have a bigger incentive to accept your terms in order to get paid. They’re small enough that economies of scale don’t yet work in their favor; they must work harder to stay in business.
Their willingness to just say screw it and sue you matters. Some debt collectors are more “sue happy” than others. If you drag things on forever and it becomes clear to the collector that you’re stonewalling and and costing them money by wasting their time, they may just drop negotiation and move right to suing you. So, while it’s a good idea to push hard and take your time to get the best deal under the best terms that you can, don’t think you can hold out forever — you can’t.
The Negotiation Process
Negotiating technique matters a ton when you’re trying to get a collector to agree to a pay for deletion request. It’s usually a bad idea to open negotiations with terms before agreeing to a price.
Start by disputing the debt. You need to make sure the collector you’re dealing with is the actual owner other of the debt first, or you’re paying the wrong party and nothing else matters.
Once you’re sure of who you’re talking to, send a lowball offer. How lowball? Unless you’re dealing with the original creditor, start with 20% and see how they react.
Don’t lie, and don’t feign poverty if you’re not actually poor. Use language like “are you open to accepting a lesser amount?” You might also propose something like “I’d be willing to pay something like [a figure that is 20% of the original debt amount], is that acceptable?”
Don’t be afraid to lowball a debt buyer. Why? Because debt buyers typically pay 4–6% of the total debt amount to purchase your account.
Wait for them to agree to agree on a figure. Once you’ve got them locked in to a figure, then and only then hit them with the “pay for delete” terms and see what they do.
They’ll push back — they may even ask for a higher payment amount — but if you’re persistent, there is a good chance you can get the collection agency to agree to your terms. You can’t make them if they don’t want to — tenacity and persistence matter.
Other Things You Should Know
It’s a nasty trick and it sucks when it happens, but even if you get a debt collector to agree to your terms in writing, they may try to get away with not following through. You may end up having to send a copy of the “pay for deletion” agreement to the credit bureaus, show proof the collection agency agreed to the terms, and ask them to honor it since the debt collector clearly isn’t up to the task. This won’t thrill the credit bureaus, but it’s likely they will enforce the terms if the collection agency drops the ball.
Remember: it can take 45–60 days before big changes to your credit report like a deleted collection account are well reflected. Moreover, not every financial institution has real-time access, which can increase the delay.
Lastly, if you send a debt validation request to a collection agency and they don’t respond, you can skip a whole bunch of steps. Once 30–45 days go by and you don’t get a response to your debt validation request, do yourself a favor and dispute the item directly with the credit bureaus.
If a debt collector fails to respond to a debt dispute that comes through a bureau, the debt will fall off your report and the debt collector will soon lose the right to collect on the debt. That will save you tons of time and money.