Your credit history indicates your ability to pay bills on time as it records your payments and debts. Late payments or too much debt often leads to a bad credit score, which can be very annoying in financial life. For example, you may find it troublesome when you apply for loans or lines of credit. Though approved, poor credit will get you to pay more interest than usual. Under this condition, “pay for delete/remove” may be a choice. But make sure you learn all about its basics and limitations. This article offers what you need to know.
“Pay for delete/remove” is a negotiation strategy to remove negative information from your credit report. Here’s how ‘pay for delete/remove’ works (3 options):
- Agreement with creditor
You can tell your creditor that you would like to pay a part or all of the outstanding balance (the amount you owe on a debt as of a certain date). After reaching an agreement, the creditor will contact the credit bureau to take back derogatory remarks or anything that indicates late or missed payments.
However, credit reporting bureaus strongly oppose to the action to delete accurate information in the credit report. And according to the law, creditors are obligated to file complete and accurate reports to credit bureaus.
- Removing debt collection accounts
You can propose to pay off your collection account in a letter or call to the debt collection agency. In exchange, they will wipe the account from your credit report. Remember to get that in writing to enforce it.
It’s worth mentioning that negative information reported by your original creditor may not be removed in this way. Because the creditor may have a contract with the debt collector, which does not allow the creditor to change the information reported. In such case, the debt collector may ask you to pay your account in full to remove all the bad credit report.
- Hiring a credit repair firm
These firms can contact the credit reporting agencies to give objections to errors or untrue information in the report. And they will request to remove the negative information on your behalf. Of course, you need to pay a fee for the service, including a setup fee and a monthly fee. The setup fee usually ranges from $10 to $100, while monthly fee from $30 to $100.
But you need to do many things by yourselves, including looking for the errors and untrue information, disputing them with the credit bureaus, following up on the investigations. Moreover, you need to avoid those firms that overly promise or use credit repair methods not covered by the Fair Credit Reporting Act (FCRA).
At last, now you may be aware that “pay for delete/remove” is a gray area. Though it is not expressly prohibited by the FCRA, you can never see it as a quick fix for your bad credit history. At the end of the day, paying your bills on time will never get you into such trouble.