Negotiating

Let's say you owe a creditor and you want to settle your debt ( assuming you can afford to ).

If you plan on paying the full amount, never pay without receiving a letter stating that the debt will be deleted from your credit report. The key word is deleted. Many companies will report your debt in their systems as a "paid collection" or a "paid chargeoff". If your collections are still showing on your credit report after you paid them - even though it states "paid" , the fact that this account is showing in the collection area of your credit report it will hurt your score.

Do not let a creditor tell you that they are "not able to write you a deletion letter" and delete a collection - especially if you paid them. It's simply not true. If you make payment arrangements and agree to send post dated checks, make sure that you tell ( in writing and verbally ) the creditor that you know it is against federal law to cash them before the date on the check. This law is part of the Fair Credit Reporting Act.

Just remember that collection agencies settle for pennies on the dollar. Don't pay more then you need to. Their business is to make money. Collecting on any debt is a plus for them so make it a win/win. You settle and get your deletion letter, and they get their money.