Have you just heard the bad news that your mortgage is going to be more expensive because you have a bad credit score? Sometimes these things can come as a shock. Don’t panic just yet though because there are actions you can take to ensure you actually have the right credit score, including sending a pay for delete letter. Although, you can either research and fix things on your own or you can choose to work with a credit repair company.
What is Pay for Delete?
- A request letter to your lenders
- A negotiation tactic
A pay for delete letter is essentially a negotiation tool. Through this letter, you’re offering to pay some or all of your debt in exchange for your lenders to remove negative items from your credit report. It’s easy to do this yourself. On the other hand, you can also work with a credit repair company who will do this on your behalf. The chances are that they’ll be able to draft something that sounds more formal and legal than anything you can produce.
Can a Pay for Delete Letter Help your Credit Score?
- No guarantee
- Easy to do for certain scenarios
A pay for delete letter sounds like a wonderful thing. This is often why credit repair companies like to use them. After all, who doesn’t want to politely ask their lenders to remove negative items from their credit report for a fee? Of course, there’s nothing stopping you from making requests and some lenders might reply favorably. Don’t forget though that you signed an original agreement with your lender and that’s what they agreed. They don’t usually like to change the terms so there’s really no guarantee.
Many credit repair companies still advise on using a pay-for-delete letter despite the credit bureaus frowning on the tactic. Nevertheless, there’s no harm in sending them and they’re completely legal. The best part is that if you’re successful then you’ve saved yourself a lot of time and stress. During these times though, it can be useful working with a credit repair company because they can help you word the letter more professionally. They’ll also advise you on how to use it appropriately because they tend to work best for specific credit score issues.
How a Credit Repair Company can help with your Pay for Delete Letter
It’s important to note that everything that credit repair companies do can be done by yourself and for free. Then again, a credit repair company charges you a fee for the time they spend doing things on your behalf as well as for taking away your stress and hassle. Don’t forget that they also bring years of experience and know-how dealing with these processes and legal formalities. Furthermore, the best credit repair companies offer a full money-back guarantee if they don’t get you any results. Simply check their track record and status with the Better Business Bureau.
To give you an idea, these are some of the things you can expect from credit repair companies:
- First review your credit reports
- Dispute any negative items from your credit report
- Negotiate with your lenders
- Highlight any zombie debts
First review your credit reports
The first step is always to get your credit reports from the credit bureaus. There are 3 in the US: Experian, Equifax, and TransUnion. Each one has a different process but essentially, they’re all governed by the Credit Repair Organizations Act. You’re therefore allowed to ask for a free copy from each of the bureaus once every 12 months.
Dispute any negative items from your credit report
Once you or your credit repair company has received your credit reports then you can review them together for any mistakes. These happen more often than you think. A classic example is through identity theft where someone has opened a bank account in your name and taken out loans that you know nothing about.
It’s actually relatively easy to dispute negative items by following the bureaus’ online processes. Although you should probably also send a credit dispute letter physically through the post. This gives you a legal trace in case anything goes wrong. Either way, the bureaus then have 30 days to review and amend any mistakes. Moreover, your credit repair company can follow up on the details if need be.
Negotiate with your lenders
Dealing with lenders can be daunting. Don’t underestimate the years of experience that credit repair companies have to deal with debt collectors. They know the language and processes inside out so that you don’t have to get lost in them. Sometimes it’s worth getting credit repair services just to have someone argue on your behalf.
Highlight any zombie debts
It’s worth pointing out another potential scam that can come up as errors on your credit reports. All debt has a statute of limitations attached to it which means that it’s written off after 7 years if no actions have been taken. Zombie debt re-awakens this debt and tries to make out that it’s current debt. You actually have no obligation to pay it. Many people don’t realize this and so credit repair companies help them to get to know their rights.
Parting Words on Working with a Credit Repair Company and using a Pay for Delete Letter
So, does a pay for delete letter work? The answer is actually on a case by case scenario. Your best bet is to work with credit repair companies who’ll know how to strategize to improve your credit score.
A pay for delete letter is one approach and not necessarily the most successful one to use. If you can, you should start by disputing any potential mistakes on your credit report first. Having said that, sometimes a pay for delete letter can be useful although a credit repair company will be able to explain exactly when and how. So, yes, you have to pay a fee to use credit repair companies but they offer reassurance and efficiency for a process that can quickly become overwhelming. At the end of the day though, the choice is yours.