Thus far, we’ve reviewed two tactics through which you (or your clients, if you are a real estate, lending or insurance professional), can remove negative items from credit reports: debt validation, and the use of the “pay for delete” technique. Now, let’s review another approach: payment to the original judgment creditor.

There are two types of debt collectors: Debt buyers, and companies which are hired just for the purpose of collecting on a debt, often known as debt collectors (although a debt buyer is also legally a debt collector).

Debt buyers are firms which purchase delinquent or charged-off debts, and attempt to collect on them, using a range of tactics, from calling those who owe debts, and sending letters, to filing lawsuits and obtaining judgments. Debt collectors, who did not actually buy a debt, have merely been hired to collect the debt, by the original creditor, who still owns the debt. To accomplish this, they can use a range of tactics, similar to a debt buyer (although debt collectors are often somewhat less aggressive than debt buyers). In both cases, the buyer or collector is likely to also report these items, to one or more credit bureaus.

So, how does it matter to you (or your clients), whether it is a debt buyer, or collector, who is seeking payment on the debt? Simple: If it is a debt collector, you have an additional settlement option: direct payment to the original creditor.

Since the debt collector has merely been hired to collect on a debt, you/your clients can often directly settle and pay the original creditor. Because you did not directly pay the debt collector, they are not allowed to mark this item as paid; in fact, they can no longer report the debt at all, because they no longer have authority to collect on this debt.

However, to make sure that your/your client’s credit report reflects direct payment to the original creditor, rather than the debt buyer, you will want to ask the original creditor to recall the debt, so that they are in full control/ownership of the debt, at the time that you pay the debt off (simply use this phrase “please recall the debt”, before making payment). Additionally, as always, you will want to obtain a receipt of the payment, so that there are no questions as to whether you actually paid off this debt.

In many cases, it isn’t easy to figure out how actually owns the debt. A debt collector who has merely been hired to collect on a debt, may not always admit that they don’t own the debt (after all, they want to get paid)! Therefore, you will often need to contact both the debt collector and the original creditor, both on the phone and sometimes in writing, to find out who actually owns the debt here. If the original creditor does still own the debt, you are in luck: A settlement with the creditor may well be possible, resulting in the removal of this item from credit reports.

Shiva Bhaskar is an experienced consumer credit attorney, and the cofounder of Tier One Credit (www.tieronecredit.com), a credit consulting firm dedicated to helping every American enjoy the best credit score possible. Shiva can be reached by email at [email protected].