Even if you pay a collection account at one point or another, you may find it incredibly difficult or next to impossible to completely remove it from your report. However, those looking to remove a zero balance collection account from their credit report may have come across a method known as the “pay to delete” strategy.
With the pay-to-delete strategy, you can go into negotiations with the debt collector so that they stop reporting the collection account to the credit bureaus. The exchange, in your case, is payment. You may either have to settle the debt for a lesser amount or pay the full amount that is owed.
Now, hiring a pay-to-delete service may not be necessary, as there are sample pay-to-delete letters that you can find with a quick Google search. However, you may also choose to go with a credit repair service in this instance, as they can help with the same thing.
Make sure that you keep in mind: debt collectors do not have any obligation to accept offers outlined in your deletion letter. Basically, this particular strategy does not offer guaranteed success.
However, if a collection agency agrees to delete your collection once paid off, it is important that you get an agreement verification BEFORE you make any payments. This way, they will have a legal obligation.
Will Pay-to-Delete Increase My Credit Score?
It is important to remember that FICO 9 and VantageScore 3.0 and 4.0 do not penalize collections that have been paid. If you have a paid collection on your credit report and the lender you received your money from uses one of these credit scoring models, you may not have any problems. In a case like this, your paid collection won’t have any impact on your credit score.
With FICO 8 and other earlier FICO credit scoring models, even paid collections can have a negative impact on your credit score. If you opt for a pay-for-delete arrangement, you could increase your credit score after the collection is removed.
One thing to note is that there are times in which deleting a collection account could bring your credit score down. The reason for this is that there are certain “buckets” or “scorecards” within each credit scoring model. These different buckets put consumers in different categories based on the things in their credit files.
Conclusion
If you’re dealing with a collection account, you may have to deal with bad credit for a little bit. However, it’s not the end of the world. After seven years, whether they have been paid or not, they must be removed from your credit score, offering you a new era to build your credit score back UP.
To increase your score faster and move the process along, you might want to consider purchasing authorized user tradelines.
When you are an authorized user, the tradelines you purchase go directly onto your credit history, offering you a potential increase to your credit score. Essentially, you are given the opportunity to obtain credit from other life purchases from someone else’s positive history.
If you have any other questions regarding authorized user tradelines, make sure to get in touch with us here at Boost Credit 101!
