The Truth About Creditors and Collection Agencies: Can They Remove Negative Marks and Do They Follow Through?
It used to be possible. Not any more. One of the factors that led to the recession of 2008-2009 was creditors and credit reporting agencies playing fast and loose with the facts. This led to inflated credit scores, which resulted in loans being given to unqualified borrowers at artificially low interest rates.
Circa 2010, the major credit reporting agencies banned the practice of clearing delinquency records and marking records as Paid as Agreed in exchange for an agreed sum. Violation of this policy rule can result in a creditor losing access to credit reports, which would put them out of business very quickly.
lsquo;It varies. If you have it in writing, they’ll usually follow through if you pressure them. If not, they’ll often not remove the negative marks. I would not rely too much on what a collector or credit bureau ;
A debt collector will agree. Sure. Why? Because it isn’t them reporting the delinquency. It is the original creditor. Debt collectors agree to it because you will pay them, thinking it will make a difference. It won’t. What they agree to has zero bearing on what the original creditor will report.
lsquo;Some will and some won’;
It is called Pay for Delete or simply PFD. Most original creditors will not offer PFDs, generally with the weak excuse that it is prohibited by law. In fact, the law does not prohibit it; it only states that what is reported must be accurate, but it does not stipulate that a creditor has to report in the first place. The credit reporting agencies, however, frown on PFDs.
Most collection agencies and junk debt buyers will agree, often reluctantly, to a PFD. They are interested in getting the money and would not let a simple PFD get in the way.
But here’s the catch: a creditor or collection agency agreeing to a PFD does not guarantee that the original creditor will follow through. The original creditor might not report the delinquency as paid if they disagree with the agreement or if the agreement is not legally binding.
To sum up, while some may agree to a PFD (Pay for Delete), it is not a guarantee that the original creditor will follow through and remove the negative marks from your credit report. It is crucial to secure a written agreement to ensure that the creditor honors the deal.
In the quest to improve your credit score, it is important to seek credible advice and understand the limitations of these practices. While you may negotiate with creditors and collection agencies, the ultimate decision lies with the original creditor. Therefore, always insist on a written agreement before agreeing to any terms that promise to remove negative marks from your credit report.
If you need further assistance or more detailed information, please feel free to contact a reputable credit counseling service or consult with a financial advisor.