Using a pay for removal service to have his past-due accounts removed from his credit report, Reddit user Kyle Gardner (not his real name) recently detailed how he was able to raise his credit score by 100 points. Gardner essentially hired a business to have his negative accounts cleared from his credit report.
How recently have you checked your credit score? Visit Credit Sesame to view your free credit score.
We decided to contact Gardner for the whole story because many credit consumers are unsure of how these pay for removal services operate. There is solid cause for your skepticism about these pay-for-delete services. This kind of service is not advised. They are expensive, first of all, and there is no assurance that your score will improve and the negative accounts will be removed from your report.
Actually, paying for erase services is against the rules of credit reporting agencies. In a nutshell, because credit reporting bureaus prohibit the practice of “pay to delete,” a collections agency is frequently limited to disputing the item in order to get it deleted. They prohibit this technique because, if you pay to have it deleted before the designated period of time has elapsed, it could distort the information a lender might find on your credit report.
Credit, however, is an inevitable part of one’s financial life, particularly if they need to purchase a new vehicle, home, obtain a loan, obtain a credit card, etc. There will inevitably be people who choose to take this route out of desperation and the need for an immediate credit repair. There is no such thing as an instant remedy for bad credit.
It’s crucial to learn as much as you can about pay for erase services before we share Kyle’s experience, in case you’re considering doing it.
Breakdown of a poor credit profile:
- Foreclosure of a home
- Had student loan defaults
- Credit card defaults
- He didn’t use a credit card for seven years, simply using cash.
- Credit score of 585 (which puts the borrower in the unfavorable “subprime” category with lenders).
Gardner was living money to paycheck in Tulsa, Oklahoma after his divorce ten years ago, barely managing to make ends meet after his child support payments. Additionally, his ex-wife permitted the foreclosure of their home.
His credit suffered after he stopped making payments on his credit cards and student loans. When he and his new wife requested a loan for a new car in January 2015, his credit score was between 585 and 590. He understood that he needed to swiftly fix his credit.
Gardner made the decision to spend cash alone for more than seven years after his credit suffered so that all of his bad financial history would disappear from his credit reports.
Gardner also utilized pay for removal to settle two of his past-due accounts with the same collections company. He spent around $250 in total: $70 for one account’s removal from his credit report and about $180 for the other. Kyle’s total cost wasn’t particularly expensive, but perhaps that’s exactly why he chose to gamble on pay for delete.
Here is what transpired.
“I merely called them and said that I needed to get these items deleted off my reports,” he added. “It was extremely straightforward for mine.” “This specific business accepted payments through its website.
“When I wanted written assurance that the items would be taken out of my reports, the phone representative did little more than check a box and instruct me to reload the page. This notice affirms our intention to erase these items from your credit record following payment, according to a bold banner that was now visible throughout the page. In case they weren’t successful, I documented everything and took screenshots.
“After that, I made a secure debit card payment on their website. No payment information had to be provided over the phone.
Gardner didn’t hear anything about it from the credit reporting companies, but he kept an eye on his Credit Karma and Credit Sesame accounts for any new information. Within roughly two weeks, the two accounts disappeared from his credit report, according to him.
Like Gardner, you should regularly check your credit score for free on Credit Sesame.
Riding the wave of good credit
Gardner asked his father for permission to add him as an authorized user on one of his credit cards in addition to paying for the removal. The card was only retained for urgent situations.
Gardner maintains low balances — approximately 4% and never more than 10% of the credit limit — and makes careful to pay off all of his bills in full each billing cycle when his credit started to improve and he was able to obtain new credit cards of his own. His credit lines are currently getting close to $50,000 thanks to gradual increases in his credit limits.
Gardner’s FICO score increased to about 765 at the end of 2015. His Vantage Score was estimated by Credit Sesame and Credit Karma to be between 798 and 803.
What you should know about removal fees
What you should know if you’re considering following Kyle’s example is listed below.
- Legally, collections are allowed to be on your credit report for seven years after the account got past due. Paid collection accounts on your record won’t be deleted by the credit reporting bureaus.
- Even after a debt has been fully paid off, collection agencies are not required to stop their collection efforts. You might have more success negotiating with the debt’s original source.
- It’s possible that eliminating a bad account from one of your credit reports won’t have any impact on the other two if the account appears on all three of them. (Ask if the debt collector or creditor submits information to all three bureaus.)
If you have a valid dispute about a debt, you can ask for it to be removed from your credit report if you resolve it since collections companies are not allowed to report inaccurate or incomplete information to the credit bureaus.
- Depending on the credit scoring model being utilized, paying off a collection account in full may raise your credit score. The most recent FICO score methodology, FICO 9, penalizes the consumer for delinquent collection accounts while ignoring all paid collection accounts. Unpaid collection accounts with amounts of under $100 are not taken into account by the FICO 8 scoring model. Versions 3 and later of VantageScore disregard settled collection accounts.
- While VantageScore 3.0 and FICO 9 are more recent scoring models that may work in your advantage, FICO scoring models are software that the creditor must buy. Today’s creditors frequently employ outdated scoring model software.
- Pay off your debt to prevent creditors from suing you.
Positive, paid (and closed) accounts are kept on your account for ten years. Open accounts that are in good standing are kept open forever.
With the help of pay for delete and other money management techniques like getting an authorized user card and paying off his credit cards in full each month, Gardner was able to raise his credit score to the 800 range.
Paying all of your bills on time and continuing to make payments toward your debt are the finest things you can do to enhance your credit.