Can You Pay to Remove a Negative Credit Report Item?
Different types of derogatory items—such as late payments, charge-offs, or collection marks—indicate financial missteps. They signal to lenders that you’ve struggled to meet financial obligations in the past.
The result? Higher interest rates, limited access to credit, and a tarnished financial reputation.
So, whether you're trying to secure a mortgage, qualify for a car loan, or even rent an apartment, derogatory marks can make life unnecessarily difficult. Even utility companies might require hefty deposits before providing services, and you may end up paying higher insurance premiums.
If you are struggling with bad credit, you're probably looking for a way out, a quick way to fix your credit. And the idea of simply paying to make those negative marks disappear might have crossed your mind.
It sounds tempting, almost too good to be true. But is it truly effective, and more importantly, is it worth pursuing?
What is ‘Pay for Delete’?
Pay-for-delete is a negotiation strategy where you offer to pay an outstanding balance, either partially or in full, in exchange for removing the negative item from your credit report.
This arrangement is often used for negative items like missed payments or loan defaults that are accurately reported and causing serious harm to your credit score.
Debt collectors or creditors are not obligated to entertain or agree to such offers.
How Do You Ask for "Pay for Delete"?
Do you want to pursue this route to get rid of a bad credit report item? You can't just send in a payment and hope for the best.
You need to send a letter to the creditor or debt collection agency and specifically request "pay for delete." This letter needs to be clear and lay out your terms. A "pay for delete" letter should typically include:
Your name and address.
The creditor's or collection agency's name and address.
The name and account number you're referencing.
A clear statement of how much you're willing to pay (either the total outstanding balance or a specific settlement amount).
A written statement explicitly saying that in exchange for your payment, you expect the creditor to remove all negative references to this account from your credit reports. Be sure to mention that you don't want it listed as a "paid collection" or "settled account," but completely removed.
A deadline for their response (for example, fifteen calendar days).
Method of payment (once you receive the signed agreement).
Is "Pay for Delete" Tactic Legal?
The Fair Credit Reporting Act (FCRA) doesn't explicitly forbid "pay for delete."
Credit bureaus are required to provide accurate information. So, if the negative information is accurate, they aren't legally obligated to remove it just because you pay.
But, credit reporting is voluntary, and people do try to get accurate negative information removed through goodwill letters as well.
Dealing with Collection Accounts
The success of the "pay for delete" technique to improve your credit score often depends on whether you're dealing with the original creditor or a debt collection agency.
You can ask a debt collector for pay-for-delete, and this is legal under the FCRA, but you do need to get their agreement in writing.
Some collection agencies might proactively request the deletion of negative information once a collection account is paid in full.
However, even if a debt collector agrees to your offer, the original creditor might still have reported the negative information.
Also, some newer credit scoring models, like FICO 9, don't factor paid collection accounts into your credit score calculations.
So, if you've paid off or plan to pay off a collection account and the lenders you'll be working with use FICO 9, "pay for delete" might not even be necessary.
Potential Downsides
No Guarantee of Success: Creditors may simply reject your offer or ignore your letter. Certain types of creditors, such as corporate banks, credit unions, and even small-town banks, might be particularly unreceptive to this strategy.
Payment Without Removal: If you make a payment based on a verbal agreement, the creditor or collection agency might not follow through and remove the negative information.
Limited Impact on Credit Score: Even if a "pay for delete" agreement is successful, it might not significantly increase your credit score, especially if you have multiple negative items on your report. Newer credit scoring models do not typically take paid collection accounts into consideration when calculating your score. This means that even if the collection account is removed through "pay for delete," it might not have the impact you're hoping for on your credit score.
Risk of Restarting the Statute of Limitations: If you are waiting for a debt to become time-barred (past the period when legal collection actions can be enforced), making a payment or even promising to pay as part of a "pay for delete" negotiation can restart the clock on the statute of limitations. This could expose you to collection efforts for a longer period.
Short Payment Window: If your offer is accepted, you will likely have a short period to make the agreed-upon payment. So, make sure you have the funds available before you send the letter.
Alternatives to ‘Pay for Delete’
If pay-for-delete doesn't seem like the right fit for you, there are other ways to improve your credit report:
Dispute Errors: If there are inaccuracies, you can dispute them with the credit bureaus. This process is free and can significantly improve your credit score if successful. You can do it yourself or hire a reliable credit repair company.
Goodwill Deletion: If you've already paid a collection account, you can ask the creditor for a goodwill deletion as a favor. This isn't guaranteed, but it is worth trying.
Wait It Out: Negative items typically fall off your credit report after seven years. Their impact will also lessen over time.
Final Words
Can you pay to remove a bad credit report item? Sometimes—but it requires strategy, negotiation, and patience.
To fix bad credit, focus on building a strong credit foundation. Make timely payments, reduce debt, and dispute any inaccuracies.
While you can review your credit reports for errors, dispute them with the credit bureaus, and follow up on those disputes on your own, a reputable credit repair company like AMERICA CREDIT CARE can help you save a great deal of time and effort.
Credit repair specialists also have the tools and strategies at their disposal that help them achieve better results. They work to identify errors in your credit reports and file objections with the credit bureaus to have inaccurate, untrue, or incorrect items removed.
