Negative items on your credit report, such as accounts in collection, damage your credit score. A pay for delete is one potential option that might help you remove that account from your credit reports and send your credit score moving back in the right direction, if you can convince the collection agency to agree.
However, credit reporting agencies discourage the pay for delete practice as they require debt collectors who report accounts to the credit bureaus to provide truthful and accurate information. Removing a legitimate collections account runs afoul of that agreement. That’s why it can be difficult to get a collection agency to agree to a pay for delete request. Furthermore, this debt settlement strategy isn’t as worthwhile as it was in the past, depending on the type of collection account that appears on your credit report.
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Bank of America® Customized Cash Rewards credit card
BLUEPRINT RATING
Our ratings are based on specific use cases for each card. We compared this card to others in the same category and developed our rankings based on this criteria, along with our editorial input. Note that although we chose this card as the best in its category, the right card for you will depend on your own financial circ*mstances.
On Bank of America’s secure website
BLUEPRINT RATING
Our ratings are based on specific use cases for each card. We compared this card to others in the same category and developed our rankings based on this criteria, along with our editorial input. Note that although we chose this card as the best in its category, the right card for you will depend on your own financial circ*mstances.
Welcome bonus
$200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
$200
Annual fee
$0
Regular APR
18.24% – 28.24% Variable APR on purchases and balance transfers
Credit score
Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.
(700 – 749) Good, Excellent
Earn 3% cash back in the category of your choice, automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% on all other purchases.
Editor’s Take
Pros
- Lengthy intro APR financing on both new purchases and balance transfers.
- Flexibility to choose your preferred cash-back category.
- Solid welcome bonus after meeting spend requirements.
Cons
- Elevated cash-back rates have a quarterly spending cap.
- Few benefits.
- There’s a foreign transaction fee.
This card’s unique rewards structure lets you choose each month which spending category from a list of six where you want to earn elevated cash back. It’s sure to be a favorite for consumers who need flexibility.
Card details
- $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
- Earn 3% cash back in the category of your choice, automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% on all other purchases.
- Choose 3% cash back on gas and EV charging station, online shopping/cable/internet/phone plan/streaming, dining, travel, drug store/pharmacy or home improvement/furnishing purchases.
- If you’re a Bank of America Preferred Rewards® member, you can earn 25%-75% more cash back on every purchase. That means you could earn 3.75%-5.25% cash back on purchases in your choice category.
- No annual fee and cash rewards don’t expire as long as your account remains open.
- 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.24% – 28.24% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
- Contactless Cards – The security of a chip card, with the convenience of a tap.
- This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
What is ‘pay for delete?’
A “pay for delete” or “payment for deletion” refers to the process of contacting a collection agency and getting it to agree to remove a collection account from your credit report in exchange for payment.
In general, a collection account can remain on your credit report for up to seven years (and in rare cases, longer). The goal of a pay for delete arrangement is to get a collection agency to remove a collection account entirely from your credit report before the Fair Credit Reporting Act (FCRA) requires it to do so.
How does ‘pay for delete’ work?
Negotiating a pay for delete settlement agreement begins with a call or a letter to a collection agency. In your call or letter, you offer to settle a debt (or pay a debt in full) if the debt collector will agree to ask the credit bureau(s) to remove the negative item from your credit report(s).
If the debt collector agrees to your request, it’s important to get the offer in writing. Having a written offer can help protect you in case the collection agency fails to delete the account after you pay.
However, the Fair Debt Collection Practices Act (FDCPA) prevents debt collectors from making false or misleading claims, so you may not be able to get the debt collection agency to comply with your request or have little recourse if the agreement isn’t upheld.
Why ‘pay for delete’ may not be the best idea
Trying to negotiate a pay for delete arrangement can be frustrating. While collection agencies aren’t required to report negative accounts to the credit bureaus because credit reporting is voluntary, many collection agencies do share information with Equifax, TransUnion, and Experian.
When a collection agency applies to be a data furnisher with a credit reporting agency, it signs a subscriber agreement detailing what the debt collector is and isn’t allowed to do. In that agreement, a credit bureau would prohibit a collection agency from requesting the deletion of accurate but negative accounts after receiving payment from consumers. This is a common restriction in debt collection agreements.
If a collection agency violates its agreement with a credit bureau and gets caught, it might lose its ability to report future collection accounts to that credit bureau. And the inability to report activity to the credit bureaus could put a collection agency out of business. Therefore, it’s easy to understand why some collection agencies might be opposed to pay for delete agreements.
‘Pay for delete’ and your credit
For most people, the primary motivation for trying to use a pay for delete strategy is the desire to improve their credit score. Good credit, after all, can open the door to better financing options like credit cards, personal loans, mortgages, and more.
In general, paying off a collection account doesn’t remove it from your credit report. Per the FCRA, a paid collection account can remain on your credit report for up to seven years (and in rare cases, longer). Recent changes to the latest credit scoring models ignore paid collection accounts, but most lenders continue to use the older credit scoring models.
A pay for delete arrangement seeks to remove a collection account entirely from your credit reports. When a credit bureau removes a negative item from your credit report (at the request of a collection agency or otherwise), there’s a chance your credit score could improve. However, the impact of a deletion will depend on the overall makeup of your credit report, as any late payments on the account reported by the original creditor will most likely remain on your credit reports. Late payments stay on your credit reports for seven years but have less of a negative impact as time passes.
Should you use ‘pay for delete?’
Active collection accounts damage your credit score. A low credit score can make it more difficult to qualify for financing and might cause you to pay higher interest rates when lenders do approve you for loans and credit cards.
Depending on the type of collection account you owe, attempting to negotiate a pay for delete settlement might not be necessary. Paid off medical debts, for example, are no longer included in credit reports. As of July 2022, the credit bureaus changed their policies to automatically remove paid medical collections from consumer credit reports on their own (even though the FCRA doesn’t require this removal).
If you have non-medical collection accounts, attempting a pay for delete negotiation might be worthwhile, depending on the situation, because paying a non-medical collection won’t remove it from your credit report if less than seven years have passed from the date of the first missed payment on the original account that led to the collection.
Some credit scores, like FICO® Score 9 and FICO® Score 10, ignore paid collections. Yet many lenders (especially in the mortgage industry) still use older versions of the FICO® Score that may count collection accounts with a zero balance against you.
So, there’s still a chance that paid collections could hurt you when you apply for a loan, credit card, or other types of financing. For that reason, attempting to negotiate a pay for delete could be worth a try, especially if you hope to buy a home in the near future.
Better alternatives
Whether you decide to try to negotiate a pay for delete settlement or not, it’s wise to focus on building good credit in other ways. The following tips might help.
- Check your credit reports. It’s wise to review all three of your credit reports from Equifax, TransUnion, and Experian on a regular basis. You can claim free reports from each consumer credit reporting agency once every 12 months via AnnualCreditReport.com. If you discover mistakes on any of your credit reports, you can (and should) dispute them with the appropriate credit bureau. This Federal Trade Commission guide provides tips on how to manage the dispute process.
- Establish credit as needed. Building a positive credit history is another smart strategy to consider as you work to establish a good credit score. Credit cards can be useful credit-building tools when you manage them in a responsible way (e.g., on-time payments and repaying your full balance each month). Consider credit cards for people who are new to credit if you’re just starting out or becoming an authorized user or a friend or family member’s well-managed credit card account.
- Pay down debt. Reducing your credit card debt might also help you improve your credit while saving you money in interest charges. When you pay down credit card balances, you lower your credit card utilization rate, which measures the amount of debt you’re carrying in relation to your available credit. Credit utilization is a major factor that influences your credit score. The lower your utilization rate, the higher your credit score has the potential to climb.
- Pay on time every time. On-time payments are the most important credit scoring factor. Payment history accounts for 35% of your credit score after credit utilization (which accounts for 30% of your score). That’s why it’s critical to make at least the minimum payment due every month.
Frequently asked questions (FAQs)
There’s no guarantee that negotiating the deletion of a collection account from your credit report will improve your credit score. However, getting a collection account off your credit reports through a pay for delete agreement should not hurt your credit either.
While you may not be successful in convincing a debt collection agency to comply with a pay for delete request, it can’t hurt to try. However, it’s important to wait for written confirmation that a collection agency has accepted your offer before you proceed with payment.
Third-party debt collectors often buy collection accounts for pennies on the dollar. In some cases, you may be able to offer a settlement amount that is much lower than the outstanding balance to resolve a debt.
However, if you wish to entice a collection agency to delete the account from your credit report, you might have to offer to pay a higher percentage of the original balance. The collection agency might also ask you to pay the full balance before it will agree to delete the negative item from your report. Just know that a collection account paid in full is preferable to paying less than the amount owed.
