Things You'll Need:
- Phone
- Collection letter
- Computer or word processor
- Envelopes
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Step 1
The first step is to review your collection letter. Find out when the debt was reported to the collection agency and how old it is.
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Step 2
If you decide you really need to clear the debt, then you need to contact the collection agency. The best way to do this is through the mail. That way, you can track your correspondence, and it won't appear as if you are really motivated to get the debt off your credit report.
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Step 3
Remember that debt collection companies pay very little for the debts they purchase (literally pennies on the dollar). If they paid more, they would quickly go out of business. So if you offer to settle a debt, you can start very low. Offer as little as 25 percent to settle the debt.
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Step 4
If the collection company refuses, wait a month or two and then make another offer, this time slightly higher. Do not sound too anxious. You do not want them to think you really want to to settle the debt, or they will try to get more money from you.
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Step 5
Make a final offer. If they refuse, tell the debt collector you will settle the debt on your own with the original company you held the account with. Make it sound as if you will only settle with them if they offer you a really deep discount on the debt. If they tell you it will take longer to remove this from your credit report, tell them you don't care. The collection agency is required to remove any debts paid to the original creditor within 30 days in most states.
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Step 6
Contact the company you owe the debt to and ask them if they will settle the balance for a lesser amount. Just be sure to approach them in writing, and keep proof of your payment in case the balance is not removed from your credit report.
