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Pay for Delete: Is it a Good Idea?

Dear Experian,

If I pay a collection debt, and the collection company says they will delete it from my credit report, does that completely remove all negative information regarding the collection? Or will it still remain on your report for the seven years? I’ve heard about the “Pay for Delete Method.” Is it a good idea?

– CDN

Dear CDN,

The “Pay for Delete” method is when an individual offers to pay the debt they owe only if the creditor will remove the negative account history from their credit report.

Pay for Delete Risks

In most cases, this practice violates the creditor’s agreement to report accurate and complete information, so it is not likely that your creditor will agree to do so. If a collection agency makes such a promise, you should get it in writing. However, the same issue applies. They are obligated by law and contract to report accurate information.

Possible Outcomes for Pay for Delete

Paying a collection account does not remove the account from your credit report immediately. Once paid in full, the account will be updated to show “paid collection.” It will no longer show a balance due, but it will remain on the credit report for seven years from the original delinquency date.

The original delinquency date is the date the account first became late, after which it was never again brought current.

In some cases, there may be extenuating circumstances, such as a billing error on the part of the creditor. In these instances, the creditor can contact the credit reporting companies and request the account be removed from your credit report entirely. However, these instances are rare.

Impact of Paid Collections

The good news is that the newest credit scoring models are changing the way paid collections are factored into scores. For instance, with some new scoring models, collection accounts will be excluded from the calculation once they are paid, even though they are still on the credit report.

Thanks for asking,
The “Ask Experian” Team

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