The Fair Credit Reporting Act (FCRA), a federal law, requires consumer credit reporting companies to report accurate information. Under the FCRA, the information provider (i.e., the person, company, or organization that provides information about you to a consumer reporting agency) is responsible for reporting accurate information to the credit bureaus, and for correcting inaccurate or incomplete information in a consumer's credit report.
Therefore, you should be able to do nothing and once your delinquent debt is paid this should appear on your credit report automatically.
There is common misinformation or misunderstanding how paid debts can appear on a credit report. Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. This law is known as the Fair Credit Reporting Act. Under FCRA §605 (a) and (b), an account in collection will appear on a consumer's credit report for 7frac12; years. The clock starts approximately 180 days after the date of first delinquency on the account. To learn when an account will be removed by the credit reporting agencies (TransUnion, Equifax, and Experian and others), add 7frac12; years to the date of first delinquency. Subsequent activity, such as resolving the debt, is irrelevant to the seven-year rule. However, if the debt is a tax lien, that can appear for seven years from the date of payment. A bankruptcy will appear for ten years from the date of the final order. Delinquent federal student loans can be reported indefinitely, i.e., for as long as they are delinquent.
Resolving the outstanding balance appearing on your credit report should have a positive impact on your credit rating. The past delinquency will not be removed from your credit report, but it should change the listing to reflect a $0 balance on this debt. While the past delinquency will continue to negatively impact your credit, the impact should be less and it will reduce your "debt to available credit ratio," which should also have a positive impact on your credit rating.
What you may be referring to is called a "pay for delete."
Pay for delete letter
Some savvy consumers pay delinquent debt with a condition -- deleting the derogatory entry from their credit report. A "pay for delete" letter, which is also known as a PFD, is an agreement to pay a debt that is listed on a credit report in exchange for the creditor promising to delete the entry from the consumer's credit reports.
Some collections agents will honor these agreements -- others consider them a breach of contract they have with the credit reporting agencies and will not consider them. Some use "PFDs violate federal law" as an excuse for not accepting them, which is either a misunderstanding of the Federal Debt Collections Practices Act, FCRA, or is a misstatement of the law. PFDs do not violate any federal law.
If you are about to to settle a debt you have nothing to lose in asking for a PFD. Do not be surprised if the creditor refuses to consider a PFD offer -- they are under no obligation to accept them. However, it does not hurt to ask.
The Fair Credit Reporting Act (FCRA), a federal law, requires consumer credit reporting companies to report accurate information. Under the FCRA, the information provider (i.e., the person, company, or organization that provides information about you to a consumer reporting agency) is responsible for reporting accurate information to the credit bureaus, and for correcting inaccurate or incomplete information in a consumer's credit report.
Therefore, you should be able to do nothing and once your delinquent debt is paid this should appear on your credit report automatically.
There is common misinformation or misunderstanding how paid debts can appear on a credit report. Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. This law is known as the Fair Credit Reporting Act. Under FCRA §605 (a) and (b), an account in collection will appear on a consumer's credit report for 7frac12; years. The clock starts approximately 180 days after the date of first delinquency on the account. To learn when an account will be removed by the credit reporting agencies (TransUnion, Equifax, and Experian and others), add 7frac12; years to the date of first delinquency. Subsequent activity, such as resolving the debt, is irrelevant to the seven-year rule. However, if the debt is a tax lien, that can appear for seven years from the date of payment. A bankruptcy will appear for ten years from the date of the final order. Delinquent federal student loans can be reported indefinitely, i.e., for as long as they are delinquent.
Resolving the outstanding balance appearing on your credit report should have a positive impact on your credit rating. The past delinquency will not be removed from your credit report, but it should change the listing to reflect a $0 balance on this debt. While the past delinquency will continue to negatively impact your credit, the impact should be less and it will reduce your "debt to available credit ratio," which should also have a positive impact on your credit rating.
What you may be referring to is called a "pay for delete."
Pay for delete letter
Some savvy consumers pay delinquent debt with a condition -- deleting the derogatory entry from their credit report. A "pay for delete" letter, which is also known as a PFD, is an agreement to pay a debt that is listed on a credit report in exchange for the creditor promising to delete the entry from the consumer's credit reports.
Some collections agents will honor these agreements -- others consider them a breach of contract they have with the credit reporting agencies and will not consider them. Some use "PFDs violate federal law" as an excuse for not accepting them, which is either a misunderstanding of the Federal Debt Collections Practices Act, FCRA, or is a misstatement of the law. PFDs do not violate any federal law.
If you are about to to settle a debt you have nothing to lose in asking for a PFD. Do not be surprised if the creditor refuses to consider a PFD offer -- they are under no obligation to accept them. However, it does not hurt to ask.