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Living in a world full of easy money means a constant juggle of offers, some great – some not so good, to take on debt. Racking up debt is incredibly easy to do, and before you know it, the amount of debt you have a responsibility to pay off can become overwhelming.

The idea of erasing that outstanding debt you’ve had lingering on your credit report for years can seem like too good of an opportunity to pass up. If you’ve heard of Pay For Delete options, you may feel quite tempted. But before you pick up the phone to strike a deal with that debt collector, it’s important to understand the realities of this gray area practice.

While in the past, collectors who actually have been able to delete derogatory debt records in exchange for payment may have come knocking at your door, most debt collectors neither have the interest or the ability to completely delete your bad credit.

To fully understand all that is great and not so great about Pay For Delete, it’s important to know exactly what Pay For Delete entails. If you have an outstanding debt with a creditor, you can contact them to negotiate a deal. The deal entails you paying either all or part of the total outstanding balance in exchange for the creditor removing the record of outstanding debt from your credit report.

Since most debt collectors buy consumer accounts for small amounts or for a percentage of the recovery amount, negotiating a settlement amount less than the total is no problem. Getting a creditor to agree to a Pay For Delete option may be possible, but you’ll need to make sure to get the deal in writing, just in case you see the derogatory account entry pop back up on your credit record.

Most large lenders won’t even entertain a Pay For Delete option with you. So if you give them a call expecting some wiggle room, don’t expect much, especially in a Pay For Delete scenario. What you may not know about Pay For Delete is that it is often not possible for creditors or debt collection agencies to wipe that record of that debt entirely off your credit report.

This is because there may be multiple entries of the debt over the course of that debt’s lifetime. Entries are made on your credit report when your original creditor reported your account past due. Entries are made again when that account is sold to collections. Once you’ve settled your account, another entry is made. So, even if a creditor wipes out one entry, previous evidence of your delinquent account may be lingering on your report.

Also, the practice in general floats around in the gray area of legality. Creditors are obligated to report the most accurate and up-to-date information to credit reporting agencies. Creditors send information on a regular basis to credit bureaus about any or all of the accounts you hold with them, including outstanding debt.

If creditors are agreeing to wipe out your record, then that doesn’t fall in line with policies regarding accurate reporting to the credit bureaus. You may have a difficult time finding lenders who will agree to Pay For Delete, though smaller debt collection agencies, medical debt collection, or creditors that agree to circumstances beyond your control, may be more inclined to do so. All in all, only about 10% of creditors actually agree to Pay For Delete deals.

The other downside to attempting a Pay For Delete deal is refreshing the statute of limitations on the account. All possibilities for litigation in an effort to collect bad debt live only for a certain amount of time, usually anywhere between three and fifteen years.

Once you’ve made it to the end of the statute, debt collectors can no longer pursue you to collect the debt through legal means. The statute starts from the date of the last activity on your account. So, if the last activity was the transfer of the account to collections, your account may be progressing toward the end of the statute. Once you make that call to the debt collection agency to arrange Pay For Delete, the statute of limitations restarts from the beginning.

The conversation about Pay For Delete is becoming increasingly obsolete, as more financial institutions start to adopt newer credit analyzing algorithms. FICO 8 and VantageScore 3 both no longer hold the outstanding debt against your credit rating if you have paid the balance off.

Yes, the record is still listed in your credit report, but these new methodologies don’t pay it any mind. So, if your bank or credit card company hasn’t switched over to FICO 8 or VantageScore 3, they will in the future, and the Pay For Delete conversation will be irrelevant.

FICO 8 already ignores debt less than $100 when calculating it’s scoring, so you may want to consider paying off large debt first since those bigger numbers have more of an impact on your credit rating.

VantageScore gives less priority to medical debt compared to credit card debt or outstanding mortgage payments when calculating its score. So while it’s important to settle all debt reflected on your credit report, it may be worth your while to start with the more heavily weighted debt first.

In the meantime, even if you choose not to pursue a Pay For Delete option, you should be working to chisel away at outstanding debt, whether the account is held by a creditor, or it’s been sold off to a debt collection. The debt you will have repaid will help raise your credit score. And as more creditors move to the new system, your chances of being approved for a better loan will increase thanks to a combination of the new system and your paid off debt.