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In collections of $1366 w/ Auto Loan. Can I get a pay to delete? If not should I settle or pay full?
The Particulars:

There is no "derogatory mark" on my creditkarma report for this from some reason. It does show up as the following, under my "total accounts":
Closed Account Balance $1,366 Reported May 25, 2010

The auto finance company is Toyota Financial. The collections agency offered me a settlement of roughly $900. I've reached out to them about a Pay for Delete and they said I have to speak to Toyota. Toyota said that I have to deal with the credit collector. I've not admitted debt. I called Toyota back and they say they have no idea what a "Pay for Delete" agreement is, and that there's no way they would issue anything like that.

My questions are:

1. Is there a pay for delete option, or is that just a myth? If so, what can I do to get that? Toyota may find that I indeed owe the debt and that there was no mistake on their part.

2. If pay for delete is not an option, what are the pros and cons of paying in full vs. taking the settlement? I'd pay the settlement in a lump sum.

Thanks very much in advance for your advice!

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There is such a thing as "pay for delete agreements" but only with companies that accept agreements like that. Instead of speaking to them about a "pay for delete agreement" just say "I will pay this if you remove the account from my credit reports".


Is this debt within the "statute of limitations" in your state to be sued for it? If so, then consider getting it paid. If it is outside the "sol" and you cannot be sued for it, then you may be wise to just let it age and fall off of your credit reports and if contacted by anyone asking you to pay it, send them a "cease and desist letter" telling them to no longer contact you about the debt.


Paying it in full or settling: there really is no difference. The only thing that paying it in full would do, would be that it would look better if your credit report is under manual review by an actual person, BUT it will still look bad to most reviewers and for most credit apps your credit will not be manually reviewed as a computer system will do it and with a computer system you will be dinged the same either way in most cases. That said, unless you are going for a mortgage loan soon (where your credit will be manually reviewed), then you would probably be better off to settle for a lesser amount if you decide to pay it.

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actually settling a debt for a lesser than full amount does impact your score. reason being you did not fulfill your agreement for the debt. 

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if toyota isn't reporting anything derogatory, then why ask for deletion? if they show the account was in good standing with good pay history, it's not hurting you! now, the collection agency can hurt you. why they don't report it, i have no idea. maybe they only report to experian... you do realize there is a third agency right? CK uses transunion and equifiax. 

my advice, if the debt is recent, say 1-2 years, and they are not reporting the collection, then just pay them off. if you pay them in full they have less incentive to do anything in the future, like report an unpaid balance etc. if it's really recent, like a month or two, they may have just not gotten around to reporting it yet! in this case the collection may just be right around the next corner from being reported. 

if the debt is old, like 4-5 years, and they still have not reported it, then chances are they are not. i wouldnt mess with it in that situation. 

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