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I am negotiating with a collection agency over payment of around $2500. Talking on the phone with them, it seems that I can't get an unequivocal "yes" to delete their entry from my credit report on all 3 credit reporting agencies.

I seem to get a wishy-washy "once the payment is in, a process takes over... blah, blah."

So I've heard about the "Pay to Delete" letter. A sample is available here. It basically states the conditions of repayment and that they will delete the debt from the credit counseling files.

Is it worth anything? Is it legit?

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I would also ask them to write you a letter (or sign one) in exchange for your payment that states the debt is paid in full. Then if they don't take it off you can dispute the item with the credit agencies and give them the letter as evidence.

If you do this, I'd make sure the letter is on the letterhead of the original company that the debt is listed for and not some collection agency.

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    The debt being paid in full and "pay-to-delete" are quite different. A debt may be marked paid in full on the credit record and that same record may still show that the debt was previously delinquent (very bad) and that the person was sent to collections (also very bad). Go for deletion. – Sean W. Jan 10 '12 at 18:39
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The letter gets your terms and conditions on the table. You should always try to negotiate with debt collectors in writing as much as possible.

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At first I thought this might have been for some third party negotiator. But I reviewed the letter and like the idea.

To John's point, and this may kill the idea, many collection agencies buy paper by the pound. By this I mean there are debts that appear noncollectable and are sold for pennies on the dollar. The agency buys these debts in such volume they are able to make a profit if one in 10 make any effort to pay. That said, the original lender may have written it off, and actually has no financial interest any more. They gave up on the loan, and sold that piece of paper. (Non unlike when I sold a rental property with a tenant in it. I made no claim to the tenant or buyer. I had no financial interest in what happened between them after the unit sold.)

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Your credit report is supposed to be an accurate record of your interactions with creditors. If you were delinquent, your report should accurately report that you were delinquent.

If you pay off a once delinquent debt, your credit report should say you had a debt that went delinquent but is now paid in full.

Any pay-to-delete scheme seems shady as it serves to remove accurate information from your credit record. I would avoid any such plans. If they don't honor their word, your defense is "Hey, you didn't report falsehoods (that you were never delinquent) to the credit reporting agency. That's not fair that you are telling the truth!"

  • At that point it becomes "Debt collector doesn't honor their own contracts so you the credit agency shouldn't believe anything they say." – Joshua Apr 15 '16 at 3:10

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