The Case for Avoiding Pay-For-Delete Agreements

Many people struggle with high debt balances and, as a result, have collections accounts listed on their credit reports. These collections accounts will typically lower your credit score, the magnitude of which depends on many different factors. People often want easy fixes for complex problems, and one solution that some people are tempted to get involved in are “pay for delete” agreements. These agreements, however, are dangerous and should be avoided at all costs. Continue reading to learn why you should never enter “pay for delete” agreements.


Before discussing why you should avoid “pay for delete” agreements, we should first establish what they are. “Pay for delete” agreements are made between individuals who are in debt and debt collectors, who typically report consumers’ credit information to credit reporting agencies. With this type of agreement, however, the consumer agrees to pay off the balance of the outstanding collections account and, in exchange, the debt collector agrees to remove the collections account from their credit report.


People pursue “pay for delete” agreements because it is a seemingly “easy fix” to a problem. From the consumer’s side, getting the collections account off their credit report can help to improve their credit score in the future. From the debt collector’s side, they receive the outstanding money they were owed. It would seem to be a mutually agreeable deal from both sides, which is why many people are tempted to enter these agreements.


When something seems too good to be true, it probably is, and this is certainly the case with “pay for delete” agreements. There are two main reasons why you should avoid these agreements at all costs. First off, the practice is illegal. Debt collectors are required by law to report information that is complete and accurate, so this type of agreement falls in a very gray area within that definition.

Second, the latest credit scoring models are starting to ignore collections accounts that have already been paid, so “pay for delete” agreements are becoming less relevant. Of course, it is important to acknowledge that many creditors still use older scoring models that do punish collections accounts. However, given the murky legality of this practice, combined with the fact that newer models are inherently doing this, it makes no sense to pursue such an agreement.


Overall, if you are going through financial struggles, particularly with outstanding debt balances, understand that you are not alone. Many individuals experience these same struggles and are looking for a way out. The key, however, is to not give into tempting “quick fix” solutions as is the case with “pay for delete” agreements. While it may take time to build your credit score back up after having a collections account, there are many organizations out there that can provide reputable advice on strategies to do just that. Plus, it is well worth the effort as opposed to having to deal with any legal troubles you may encounter by entering into one of these agreements.