01-12-2013 12:17 PM
Hi there. I have a question about this specific situation.
I have a citi card credit card. I have NO LATE payments whatsoever on my credit report from any of my cards. My payment was due 10-15 days ago to this citi card, and they do not report it as late until 35 days past due, which I won't let it get to that. However, they offered me online a settlement option. I owe about 3996$ and they are offering me a settlement of about 3398 or so, just below the $600 tax rule thing.
I was surprised that they offered me this considering I am not technically late/delinquint yet. I am using student loans to pay off some credit card debt, and I am considering this. However, it is only a savings of $600, and will this negatively effect my credit? I read on here that someone said a paid as settled is scored as a charge off, which is odd to me. I know future lenders will see that I did not pay the full amount, but I also read that it will not affect the score once I actually pay it. I already asked them 3 times if they would list it as "paid in full" if i pay the full settlement amount, but they said they cannot falisify records.
The difference here is that the negotiation/settlement is offered directly from Citi, and not a counseling service who lets the cards go 6months late and thats where negativity comes from. Even if it never shows as late, will this be a bad thing on my credit? I am not sure what my actual score is right now, but my credit history is almost perfect, with all accounts shown as current and never late. What do you guys think? Will this hurt me at all, and if so, for how long? I am not planning on 'using' my credit until 2015 or so for a car, and a few years after that toward a house.
01-12-2013 12:45 PM
i'm not sure as of the rating, but I would think that anything other than paid as agreed, paid, etc is not acceptable and will ding you. But in this case I'm sure that noting "settled" will do you harm for 7 years. If you can afford to continue to pay then a $600 break is not worth a 7 year sentence IMO.
The fact that you are a few days late now may count internally with Citi but it shouldn't hit your report because you are not 30 days late. In the near future this internal score may affect you but time heals all wounds. With as you say a near perfect history, why jeopardize that now? Just pay it now and keep paying on time. Citi will sooner or later get over it and you keep your current credit clean.
01-12-2013 12:54 PM
Thanks. So, this will for sure negatively affect my credit? I can pay the difference, but figured if it did not hurt me, I would use the 600$ towards other bills/credit cards since I got the option before being reported as late. Thanks for the reply!
01-12-2013 01:30 PM
I would strongly recommend to pay the minimum payment immediately and make sure that nothing gets reported as late on your report. Its not worth taking a chance on anything that could potentially damage your credit for years and years to come. If i were you, i wouldnt take a chance at all.
01-12-2013 08:48 PM
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.