Have you have been making debt payments for several months and are now down to the last payment? If yes, then you'll require a record from the collection agency acknowledging you've paid the debt in full. This is when you'll need a Paid in Full letter.
You should send a Paid in Full letter to your creditor or collection agency once you have paid the agreed amount in full. A Paid in Full letter notifies your creditor or collection agency of your final debt payment. It also requests acknowledgement of the completed debt payment in writing. The letter not only informs the agency of the final and last payment but also warns of repeated collection efforts. Alternatively, you can also receive a "Paid in Full" letter from the creditor or collection agency informing you that the debt has been paid in full.
Generally, once you pay off the debt in full, the collection agency informs the credit bureaus about it. The credit bureau in turn should update your account status as "Paid" on your credit report. You should pull your credit report and find out whether your account status has been updated or not.
Sample Paid in Full letter
Your Name __________
Your Address __________
Your Phone # __________
Collection agency Name _________________
Collection agency Address ________________
Dear Sir or madam,
Re: Account Number ______________________
Please find my enclosed final payment for the above referenced account. I am requesting for a written confirmation showing this account as [paid in full or settled] as per our agreement on [date of agreement]. If you don't provide me with a written confirmation, I will use the receipt of this final payment as proof that you accept the above referenced account as [paid in full or settled].
Since the debt has been paid in full, I do not expect to hear from you, except to confirm the account is paid in full. I will regard any other communication from you or your agency as harassment and will report it to my State's Attorney General and to the Federal Trade Commission (FTC) immediately, and if required take the necessary legal action to protect myself. Finally, I expect you to delete this account and my personal information from your records.
Your Signature ________________
Your Name ___________________