I am trying to fix my credit and one of the collection agencies that has one of my old credit cards has sent me a settlement letter. should i just pay it off in full which is 00 or should i take there offer of 0? If i do settle will it help my credit or hurt it?
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Fri, Jul 23, 2010
July 23rd, 2010 at 6:38 am
The damage has already been done to your credit. Settling will mark the charge off account as "paid" on your credit report which will not really help your score. If they will delete the item in return for the settlement payment I would settle the account. You can begin repairing your credit one way or the other and there are people out there that can help you legally fix your credit and increase your credit score. If you would like info on credit repair send me an email. brandy@acreditclinic.com
July 23rd, 2010 at 6:38 am
It can’t hurt.
July 23rd, 2010 at 6:38 am
Pay it in FULL! Settling is right down there with not paying at all.
It’s just bad news all the way around. Make arrangements to pay it off, then ask for a good will adjustment to have the negative trade line removed. Collection agencies are more likely to remove this when they get all their cash!
Done it & it works….
July 23rd, 2010 at 6:38 am
Whether paid in full or paid by settlement, the damage had already been done when the item was charged off and went to collections. Paid in full is slightly better, but not enough to make much of a difference on a FICO score with an account in collections.
Take the settlement, then give your credit time to heal. With no further items in collections or derogatory items reported, it will take about two years to show significant improvement.
Also see if you can get an agreement (in writing) from the CA to delete the reported item in return for your settlement payment. The original charge off cannot be removed, but there’s a chance you could get the collections item off of your reports.
July 23rd, 2010 at 6:38 am
Paying back a defaulted/charged-off credit card will not restore your credit rating..Your credit report will be updated to a "Paid Charge-Off," which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid, settled for less or not paid at all, will remain on a consumer’s credit reports for up to 7 years….so you’ll be stuck with damaged credit regardless of what you do.
Strangely enough, settling this account might damage your credit score because you’re bringing a negative to the front of the line of your credit history. Even if you paid this in full…it would not help your credit.
This debt may be time barred. There is a statute of limitations for credit card debt, which is the amount of time that they can successfully take legal action against you for the debt. This time period varies for each state. You can find this time period for your state by going to the link below and looking under "Open Accounts."
http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml
If the number of years since you defaulted on this account and stopped making payments on it is greater than the number listed for your state, then they can no longer defeat you in any court action because the debt is time-barred and you don’t have to pay it back.
July 23rd, 2010 at 11:44 am
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