If you have negative items on your credit report, you can try sending the creditor a “pay for delete” letter.
This is where you write the creditor, asking if they will delete the negative item in exchange for you paying the debt in full or paying part of it in a settlement.
What Is a Pay for Delete Letter?
A pay for delete letter is a tool you can use to repair your credit. Negative items, such as delinquent accounts, can stay on your credit report for up to seven years, so it’s sometimes worth trying to convince a creditor to delete them in exchange for payment.
Keep in mind, however, that creditors are obligated by law to report information accurately, so not all creditors are willing to accept a pay for delete arrangement. On the other hand, it never hurts to ask.
Pay for delete letters are typically used when someone has a negative balance on an account. For example, if you got into a financial bind and couldn’t afford to pay a bill for months on end, you might have a seriously delinquent account that is hurting your credit score.
Once you get back on your feet, you can try cleaning up your credit by sending your creditor a pay for delete letter. While the chances of success may be slim, your creditor might surprise you by accepting the deal and removing the negative entry in exchange for you settling the debt.
How a Pay for Delete Letter Works
A pay for delete letter is exactly what it sounds like. You send your creditor written correspondence, asking if the creditor will delete a negative item or delinquent account entry in exchange for you settling the debt you owe or paying it off completely.
Depending on the type of account, how long it’s been overdue, and whether it has gone to collections, you may decide to offer the full amount or a portion on the debt in a lump sum.
Is It a Good or Bad Idea?
Pay for delete letters don’t always work, but that doesn’t mean they’re a bad idea. Before you send one, it’s important to understand that your creditor isn’t required to say yes.
You should also understand that some creditors are more likely to agree to a pay for delete arrangement than others. For example, banks and credit unions tend to be less receptive to pay for delete letters, while utility companies may be more willing to work with you.
If you have the money to offer a settlement, there is no harm in trying. You should also consider sending a pay for delete letter when there are still several years before a negative item is due to fall off your credit report.
If, on the other hand, a negative item is set to drop from your report within a year or so, you might be better off simply waiting it out. You should also check the statute of limitations for debt collection in your state.
Pay for Delete Letter Template
If you’ve decided to send a pay for delete letter, here is a basic template you can use. You may need to make adjustments to suit your needs, but the general structure should look the same.
Also keep in mind that it’s best to keep your letter as short and to-the-point as possible. Don’t go into longwinded or personal details about why you were late on your payments or couldn’t pay your bill.
Instead, keep your letter straightforward and professional. For the best chance of success, avoid legalese or fancy words and simply stick to the facts.
<Your City, State, Zip Code>
<Creditor’s City, State, Zip Code>
Re: Account Number <XXXXXXXXXXX>
Dear <Creditor’s Name>,
I am writing in regard to account number <XXXXXXXXXXX>.
I would like to offer a settlement amount of <$XXX> in exchange for your written confirmation of the following:
- You accept the settlement amount of <$XXX> as satisfaction of the debt in full.
- You agree to remove any and all references to account number <XXXXXXXXXXX> from Equifax, Experian, and TransUnion, along with any other credit reporting agencies or entities you have reported account number <XXXXXXXXXXX> to.
- You agree not to list account number <XXXXXXXXXXX> as a “paid collection” or “settled account” with Equifax, Experian, or TransUnion or any other credit reporting agencies or entities.
I will pay <$XXX> in exchange for your agreement to the foregoing terms within <XX> days of your agreement. This is not a promise to pay. This is a settlement offer made in contemplation of the terms contained within.
If you accept, please send a signed agreement that includes the foregoing terms from one of your authorized representatives. When I am in receipt of your agreement, I will send <$XXX> within <XX> days via check, money order, or wire transfer.
<Your City, State, Zip Code>
You should also send your pay for delete letter via certified mail, so you can prove the creditor received it. Be careful to get the creditor’s agreement in writing and signed by an authorized representative, as some creditors may accept your payment and then fail to follow through on removing the negative item.
If a creditor fails to uphold their end of the bargain, having their agreement in writing can help you force them to follow through. If you threaten legal action and you have the written agreement to back up your case, the majority of creditors will comply.
Pay for Delete Letter’s Effect on Credit
If the creditor agrees to remove your negative item, this can have a positive effect on your credit score. Keep in mind, however, that you’ll need to contact both your original creditor and the collection agency if your debt was charged off and sent to a collection agency.
This means that you may be successful in paying the collection company to remove the negative item, but the original creditor may still report the debt. The creditor may refuse to remove the negative item, so be aware that this is a possibility.
Pay for Delete Letter Tips
Pay for delete letters don’t always work, but they can help boost your credit score if you’re successful. To maximize your chances of success, keep the following in mind:
- Be courteous – Remember, the creditor is under no obligation to agree to your settlement proposal.
- Be professional – Keep your letter businesslike. While you may have deeply personal reasons for falling behind on your bills, treat this as a business transaction.
- Get everything in writing – If the creditor is responsive to your pay for delete letter, make sure you get their agreement in writing and signed by an authorized representative. That way, you can prove the creditor agreed to accept a settlement in exchange for a deletion.
What If Your Letter Is Rejected?
Unfortunately, pay for delete letters can be something of a longshot when it comes to credit repair. Not all creditors are receptive to them, and some will outright say they aren’t permitted to accept settlements in exchange for a deletion.
If your letter was rejected, you can simply wait for the negative item to drop off your credit report. You can also consider hiring a credit repair company to dispute negative items on your credit report.
If a delinquent item is keeping your credit score low, a pay for delete letter may be able to help you get it removed. Using a template is a good way to ensure you include all the important information, which can increase your likelihood of getting a positive response.