If you have some credit card debt that is in collection, you need to be aware of a couple of options that will help with your debt elimination strategy. Let’s say that you have the means to pay off this particular debt. The fact that it is in collection means that it is already damaging to your credit rating.
If you pay off the debt, then the collection agency will normally issue a letter of payment showing that you have paid off the debt. This is ok, but you want to do much better if you possibly can.
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Use the fact that you are paying off the debt as leverage to negotiate for a letter of deletion. This is much more powerful. A letter of deletion is a document that is sent from the collection agency or creditor. It goes to the credit bureaus and requests to them to remove the negative item (that is, the debt you are paying off) from your credit report.
What is the difference? The letter of deletion will allow your credit score to start improving immediately. Whereas, the letter of payment does not. By holding back that final payment to get the collection agency to issue the letter of deletion, you are getting much more for making good on that particular debt.
The collection agency or creditor is getting their money. So, they should be willing to work with you in a way the best benefits you.
Credit Card Debt Elimination Strategy - Watch Those Credit Report Inquiries