Get Collection Entries Deleted from
your credit report: Paid Collections Do Not
Improve Credit Scores
by Lisa Phillips
your credit report: Paid Collections Do Not
Improve Credit Scores
by Lisa Phillips
| Copyright RebuildCreditScores 2010 All Rights Reserved |
Never allow a collection agency fool you into believing paying a debt in
collections will improve your credit scores. The reality is that paying a
collection account will more likely lower your credit scores than raise
them. Paid collections do not increase your credit scores.
collections will improve your credit scores. The reality is that paying a
collection account will more likely lower your credit scores than raise
them. Paid collections do not increase your credit scores.
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Related Topics:
Why Paying an old Collection Account Lowers Your Credit Score
As a collection account gets older, FICO seems to give it less weight in
terms of your credit score. Once you pay the old debt, FICO resets
the date of last activity to the date you paid the debt and it is viewed as
a new negative debt, even though it is now paid. This is one of the
many problems with FICO scoring. There is no difference between a
paid negative item and an unpaid negative item. It is still considered a
negative entry.
When to Negotiate a Deletion
A pay for deletion is a request made by you to the creditor or collection
agency to pay a debt in full or an agreed upon percentage in
exchange for a deletion of the account or trade-line. Before
negotiating a deletion you may want to request debt validation with the
collection agency. Pay for deletions can be done with original creditors
or collection agencies.
Some collection agencies will tell you it is illegal or that they do not do
pay for deletions. They are not being honest. Just like they put the
negative entry on your credit reports, they have the power to delete it.
If you negotiate a pay for deletion with a collection agency you may
also be able to settle your debts for pennies on the dollar. See Debt
Settlement for more information.
Why all Negotiations Must Be in Writing
As a rule, you should never speak to anyone at a collection agency
over the telephone. All negotiations should be done in writing and all
letters mailed via certified, return receipt. You must create a paper
trail. Your correspondence is your proof if you ever need to pursue a
lawsuit for resolution of the matter.
Also, once you get a collection agency to agree to deletion, a copy of
that signed agreement can be submitted directly to the credit bureaus
to speed up the deletion process. Payment should never be sent
before you have an agreement signed by the collection agency in your
hands.
Sample Pay for Deletion Letter
As a collection account gets older, FICO seems to give it less weight in
terms of your credit score. Once you pay the old debt, FICO resets
the date of last activity to the date you paid the debt and it is viewed as
a new negative debt, even though it is now paid. This is one of the
many problems with FICO scoring. There is no difference between a
paid negative item and an unpaid negative item. It is still considered a
negative entry.
When to Negotiate a Deletion
A pay for deletion is a request made by you to the creditor or collection
agency to pay a debt in full or an agreed upon percentage in
exchange for a deletion of the account or trade-line. Before
negotiating a deletion you may want to request debt validation with the
collection agency. Pay for deletions can be done with original creditors
or collection agencies.
Some collection agencies will tell you it is illegal or that they do not do
pay for deletions. They are not being honest. Just like they put the
negative entry on your credit reports, they have the power to delete it.
If you negotiate a pay for deletion with a collection agency you may
also be able to settle your debts for pennies on the dollar. See Debt
Settlement for more information.
Why all Negotiations Must Be in Writing
As a rule, you should never speak to anyone at a collection agency
over the telephone. All negotiations should be done in writing and all
letters mailed via certified, return receipt. You must create a paper
trail. Your correspondence is your proof if you ever need to pursue a
lawsuit for resolution of the matter.
Also, once you get a collection agency to agree to deletion, a copy of
that signed agreement can be submitted directly to the credit bureaus
to speed up the deletion process. Payment should never be sent
before you have an agreement signed by the collection agency in your
hands.
Sample Pay for Deletion Letter
Simply paying a debt to a collection
agency may bring you peace of mind
but it will do nothing for your credit
honor your obligations. I am;
however, advocating you negotiate a
total deletion of the paid item from
your credit reports in order to raise
your credit scores.
agency may bring you peace of mind
but it will do nothing for your credit
honor your obligations. I am;
however, advocating you negotiate a
total deletion of the paid item from
your credit reports in order to raise
your credit scores.