Get Collection Entries Deleted from your credit
report: Paid Collections Do Not Improve Credit Scores
by Lisa Phillips
report: Paid Collections Do Not Improve Credit Scores
by Lisa Phillips
| Copyright RebuildCreditScores 2008. All Rights Reserved |
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 the 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.
When to Negotiate a Deletion
Before negotiating a deletion for a debt you may want to attempt debt verification with the
credit reporting agencies or debt validation with the collection agencies. If you just wish to pay
a debt then a “Pay for Deletion” may be in order. Pay for deletions can be done with original
creditors or collection agencies.
Simply put, 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. 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 entry on your credit, they have the
power to delete it.
If you negotiate a pay for deletion with a collection agency you may 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
negotiation should be done in writing and all letters mailed via certified, return receipt. You
must create a paper trail. Your correspondence is your proof is you ever have pursue a lawsuit
or small claims court matter. Also, once you get a collection agency to delete a matter, the
letter they send to you agreeing to the pay for deletion can be sent 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 Deletion Letter
Use this sample letter to request "pay for deletions.
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 the 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.
When to Negotiate a Deletion
Before negotiating a deletion for a debt you may want to attempt debt verification with the
credit reporting agencies or debt validation with the collection agencies. If you just wish to pay
a debt then a “Pay for Deletion” may be in order. Pay for deletions can be done with original
creditors or collection agencies.
Simply put, 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. 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 entry on your credit, they have the
power to delete it.
If you negotiate a pay for deletion with a collection agency you may 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
negotiation should be done in writing and all letters mailed via certified, return receipt. You
must create a paper trail. Your correspondence is your proof is you ever have pursue a lawsuit
or small claims court matter. Also, once you get a collection agency to delete a matter, the
letter they send to you agreeing to the pay for deletion can be sent 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 Deletion Letter
Use this sample letter to request "pay for deletions.
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Never allow a debt collection agency fool you into
believing that paying an old collection debt will
improve your credit scores. The reality is that
paying an old debt will more likely lower your credit
scores than raise them.
Simply paying a debt to a collection agency may
bring you peace of mind and stop the telephone
calls, but it will do nothing for your credit scores.
While I am in no way advocating you do not honor
your obligations, I am advocating you negotiate a
total deletion of the paid item from your credit
reports in order to raise your credit scores.
believing that paying an old collection debt will
improve your credit scores. The reality is that
paying an old debt will more likely lower your credit
scores than raise them.
Simply paying a debt to a collection agency may
bring you peace of mind and stop the telephone
calls, but it will do nothing for your credit scores.
While I am in no way advocating you do not honor
your obligations, I am advocating you negotiate a
total deletion of the paid item from your credit
reports in order to raise your credit scores.
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Related Topics
More Resources
Debt Validation Letter. Sample letter to request debt validation from a collection
agency.
Settle Debts with Collection Agencies. Learn to how settle debts for pennies on
the dollars with Collection Agencies.
Settle Debts with Original Creditors. Get tips to settle debts for pennies on the
dollars with Original Creditors.
Dispute Negative Credit
Learn what information can be disputed and get tips for disputing negative items
in order to get a favorable outcome.
agency.
Settle Debts with Collection Agencies. Learn to how settle debts for pennies on
the dollars with Collection Agencies.
Settle Debts with Original Creditors. Get tips to settle debts for pennies on the
dollars with Original Creditors.
Dispute Negative Credit
Learn what information can be disputed and get tips for disputing negative items
in order to get a favorable outcome.