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Hi there.
Micheal Bovee with Consumer Recovery Network and thanks for
tuning in to DebtBytes, our YouTube channel.
Today I'm gonna talk about a popular topic that I've covered
extensively throughout comments and in articles on my website.
But I haven't done a video on it, and it's about whether or
not you can pay a creditor or
a debt collector, somebody who's reporting negative things about
you on your credit report to get that off.
In other words, pay for delete, it's often referred to.
So in my experiences over the years working with consumers to
resolve debt, mostly from a DIY angle,
coaching you through the process.
You usually find that mainstream creditors,
like credit card banks, large banks, even credit unions,
small town banks are not in any way inclined to exchange money
for getting those negatives off your credit report or
editing them in any way.
So they care more about their relationship with TransUnion,
Experian, and
Equifax on an ongoing basis than you, than your small account.
And the fact is you already haven't paid them,
so they care even less, you're a statistic to them.
They're not going to engage in some kind of regular practice
that will damage their relationship with the credit
bureaus that they rely on for all kinds of decision making
that they have, rather than give you some kind of benefit.
So the fact is most of the time you cannot,
you couldn't pay a creditor three times what you owe them,
in order to get a negative off your credit report.
But there are a few weird little exceptions, okay?
As a large topic, credit cards, probably not.
But you can sometimes get small utility bills,
let's say, phone, cable, power companies,
especially that go to collection.
You can often get those paid up to current and
get them to remove those things.
It's not something that you often will see given to you in
writing, but it's kinda a quick pro quo wink wink.
Hey just give us the money and we'll get this off,
we'll remove them.
Occasionally, you might find an account that's in collection
with a medical billing company or a debt collector for
a medical billing company where you're able to remit payment,
go right even directly to the source, go back to the medical
service provider and go to their desk, and say, hey, I owe this.
I'm not sure where things are at with it today,
even though you might even know it's in collection and
heard from a debt collector.
And just give them a check and say, I just want to remit it.
They're typically gonna accept that, and
because you kinda cut out that middleman debt collector,
it's sometimes easier to dispute that off.
Not that they're really accepting money to
delete it't just kind of an end run around.
I see that happen with small medical bills sometimes.
When you're trying to get an effect on your credit report for
money, in exchange for money, you don't necessarily really
even have to worry about whether or not you can exchange payment
for a deletion because the act of paying
has to be updated to your credit report, and let me explain.
When you pay a debt collector on an account, let's say you
owe a $5,000 credit card bill, hasn't been paid in two years,
it's a charge off on your credit report.
A debt collector is now collecting it, and it's for
say, Citibank.
When you call the debt collector and
let's say you negotiate half off,
sometimes you can do better than that.
I talk about that in, actually I have a video up about City Bank,
go look for that on our channel.
But let say you negotiate half off, you pay 2500.
Well once the debt collector updates City Bank who still owns
the debt in this case, in this analogy.
And City bank updates the fact that you've paid, settled for
less, this account with your credit, so
now it shows zero balance owed.
Yeah, they're not gonna change the charge off.
If you haven't paid it in two years it charged off
a year and a half ago.
That's still gonna stay on there, but
the fact that you don't own it anymore, it's resolved.
Whether you paid it in full, paid it for less,
doesn't matter.
It's zero balance and resolved.
That will help you reach your goals for
improving your credit, building your credit score.
And if you're applying for a mortgage, paid collections don't
necessarily prevent you from getting approval.
FHA underwriting standards for example, for if you go through
a lot of the banks, they want a 620 FICO score, middle score.
And no unpaid collections at that point, right?
So you can still accomplish your credit goals without getting
things deleted.
Is paid for delete worth it?
Not in my opinion.
Again, not unless you're dealing with small medical bills or
utility bills.
Even bringing up the topic is dangerous, because you're
telegraphing to a debt collector that you care about your credit.
So if you're trying to settle.
If you're paying in full, whatever.
But if you're trying to negotiate a reduction in
the overall price of what you're going to pay, settle for less.
Telegraphing that you care about this getting deleted from your
credit report means that they have a little bit of leverage
over you that they didn't have before you revealed that.
Okay and because they have a legal obligation under the fair
credit reporting act to update accurate,
current up to date information to your credit report anyway,
you're gonna get what you need.
So I'm not a big of telegraphing that you have a specific goal or
need in mind when you reach out to pay a debt that's gone unpaid
for all those years.
So, as far as I can kinda in a Mythbusters spirit,
does paying for the delete exist?
Sort of, mostly busted.
See you on the next video.
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