Three things make a pay for delete offer work: the debt is yours and accurate, you can pay the amount you offer right away, and the deletion is in writing before any money moves. Keep it to one page and keep it businesslike.
[Your full name]
[Your current address]
[City, State ZIP]
[Date]
[Collection agency name]
[Collection agency address]
Re: Account / reference number [as shown on their notice or your credit report]
Original creditor: [as reported]
Balance reported: [$ amount]
To whom it may concern:
I would like to resolve this account. I am offering [$ amount] as payment in full, on one condition: that you have this account deleted from my file with every credit reporting agency you report it to, rather than updated to show it as paid or settled.
This offer is made only to settle the account. It is not an admission that I owe this debt, or that the amount you report is correct.
If you accept, please confirm these terms in writing, on your letterhead and signed, before I send any payment:
1. The amount you will accept as payment in full.
2. That you will request deletion of this account from Equifax, Experian and TransUnion within [30] days of receiving payment.
3. That you will not sell or transfer any remaining balance to another collector.
I will not treat a phone call, or any reply that leaves out the deletion, as acceptance. This offer expires [date, about 30 days out].
Sincerely,
[Signature]
[Printed name]
How to send it
- Certified mail with return receipt, to the collector's address on its notice or on the collection account in your report.
- Don't include your Social Security number, a copy of your ID or any bank details. The account number is enough for them to find the file.
- Offer an amount you can pay at once. Collectors often buy old debts for a fraction of the balance, so a first offer below the full amount is normal. Leave room to meet in the middle.
- Pay only after the signed agreement arrives, and pay with a cashier's check or money order. Don't give a collector access to your bank account or card.
What happens next
- They agree in writing. Pay exactly as the agreement says and keep copies of both. Check all three reports about 30 to 45 days later. If the account is still there, send the bureau a copy of the signed agreement and proof of payment.
- They agree on the phone only. That's not an agreement. Ask them to put it in writing, and don't pay until they do.
- They counter. A higher amount with the same deletion term is a normal reply. Decide whether it's worth it; nothing obliges you to accept.
- They refuse to delete. Many will. You can still settle for less, or pay in full, and the account updates to settled or paid. It stays until its seven-year limit either way. A goodwill letter after paying is one more request you can make.
- They don't answer. Send one follow-up after 30 days. Silence is a no, not a yes.
Medical collections are different
The three bureaus remove a medical collection once it is paid, so a pay for delete letter is rarely needed for one. See medical collections for the rules the bureaus follow.
Sources
- Fair Credit Reporting Act, section 605, how long negative items can be reported: 15 U.S.C. 1681c
- Consumer Financial Protection Bureau, what a statute of limitations on a debt is
- IRS, canceled debt: is it taxable or not?
Credit Repair Automate offers a pay for delete only after the disputes have run their course: when an account survives the bureau disputes and a direct dispute with the collector, and still shows a balance. You enter the amount you want to offer, and the software writes the letter with the account details from your report. Boost your score .
Frequently asked questions
Is pay for delete legal?
Yes. Asking is legal, and so is a collector agreeing. No law requires a collector to delete accurate information after you pay, though, and the credit bureaus expect furnishers to report accurately, so many large collectors have a policy of refusing. Smaller agencies and debt buyers say yes more often.
Does paying a collection remove it from my credit report?
No. Paying on its own updates the account to paid or settled, and an accurate collection can stay for up to seven years from the original delinquency under FCRA section 605. Only a deletion takes it off early. Some newer scoring models, such as FICO Score 9 and VantageScore 3.0 and 4.0, ignore paid collections, but many lenders still use older models that count them.
Should I dispute the collection first?
Usually, yes. If the debt is wrong, unverifiable, or past its reporting limit, a dispute or a debt validation request can take it off without paying anything. A pay for delete offer makes sense for a debt that is yours, accurate, and still owed.
Can a pay for delete payment restart the statute of limitations?
In some states, a partial payment or a written acknowledgment of an old debt can restart the time a collector has to sue. Check your state's rule before paying anything on an old debt, and keep the letter's wording that the offer is not an admission that you owe it.
Will I owe tax on the part they forgive?
Possibly. Canceled debt is generally taxable income, and a creditor that cancels $600 or more usually sends a Form 1099-C. Exceptions exist, for example insolvency. Ask what amount will be reported before you agree.