[MUSIC] 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. [MUSIC]