Negotiating with debt collectors isn't as difficult as you may think.
Especially when you realize that you have the advantage.
After all, you have what they want--your money.
But, making a debt settlement offer isn't the end of your negotiations.
What's the next step? Ask your debt collector to sweeten the pot by doing you a favor.
Negotiate your credit rating with the creditor Before you pay anything on this account (which should be done by certified check never by payment over the phone!) ask that any negative report be deleted from your credit record.
Your creditors can report your payment history, but they aren't required to do so.
They can also change it or delete it altogether.
That's why this works.
It doesn't cost the debt collection agency anything except a little bit of time to have your account history removed from your credit report.
But, they won't do it unless they are asked, and they will usually try to get out of doing it if they can.
But, remember you have something they want, and an account that has gone to collections and been paid is just as damaging to your credit as a charge off or an uncollected debt.
And, it will stay on your record for as long as 7 years.
In fact, it's just about as damaging to your credit as a bankruptcy.
So, if your credit rating is important to you--especially if you are planning to make a large purchase at any time in the next 7 years or so--don't forget this important step in the negotiating process.
The debt collector may claim they can't make that happen.
Again, remain calm but firm, and be a broken record: "All I have is $1,000, but before I send it to you, I need your agreement that you will accept that as payment in full and delete this record from my credit report.
" Now, you might not care about your credit rating.
If you subscribe to the Dave Ramsey philosophy, your only concern will be getting out of debt, not trying to improve your credit.
If you think about it, the only reason you need good credit is if you are planning to go into debt.
But, there are some "good" debts as well as "bad" debts.
A home loan, for example, is a good debt.
And your credit score will definitely affect what kind of interest rate you can get on a home loan.
Even if you already own your home and don't plan to buy anything else on credit as long as you live, it can't hurt to clean up your credit report, so you may as well ask that this be part of the debt settlement agreement.