I have been often asked if it is possible to have a negative removed from your credit report, one that you actually owe, if you pay off the debt with a collection agency. This is known as a pay for delete deal. While some people will tell you that this cannot be done, it can indeed be done. Most creditors and collection agencies will not do this, unless the collection agency has purchased the debt.
One way to do this is to tell them you are going to dispute the amount of the debt, that you do not believe you owe that amount. Tell them you are also planning to dispute the debt with the credit reporting agencies, and are considering legal representation. Then you tell them you are willing for the sake of convenience to settle the debt for less than owed, provided that they remove the debt from your credit reports. If they accept this deal, they can and will remove the debt from your record. They agree to this based on the premiss the debt may not be valid, even if it likely is, the dispute process can drag out, and you and they have reached an amicable settlement to resolve the matter at hand. This is done every single day.
There is another way to have a negative item removed from your credit report. If the collection agency has violated the Fair Debt Collection Practices Act, you might have recourse for whats known as a “tradeline” deletion. You can negotiate with the collections agency to drop your complaint for the breaking of the Fair Debt Collection Practices Act in return for deleting the entire account from your credit report via a tradeline deletion.
In the event that there is anything inaccurate about the debt information on your credit report, and you legitimately owe the full amount, you can indeed have it removed with no problem, once the debt is paid off by the creditor or collection agency. While paying or settling the debt is not mandatory to correct inaccurate information, your creditor is more likely to co-operate fully and in a reasonable time frame. Your creditor will draft a document stating the debt is incorrect, and forward this to the credit reporting agencies. Once the credit reporting agencies receive that proof, they will remove the information from your credit report, as if it never happened.
If you should decide to pursue an agreement with either the original creditor, or a collections agency, be sure to get any agreement made in writing. Creditors and collection agencies are famous for making verbal agreements, then not following through with them. Make sure to write down the names of everyone you speak to about the matter, and ask for their extension. When trying to negotiate the removal, if it is not going well with the person you are speaking to, ask to talk to a supervisor, as they often have the authority to make such decisions. If you are denied you can always try again after a period of time has passed, such as one month.
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