Collections Company Promises to report PIF when i am actually SIF.. Pls help!

[Anonymous]

My credit card debt with DELL was sold to Midland Credit Management ( MCM). My debt was $ 4, 036.71 with DELL and now MCM has added interest and it is now $5,144.86. I received a letter from MCM notifying me of the debt and giving me the option to settle in full for $ 2, 572. HOWEVER, they have specifically written in the letter that, if i pay the $ 2,572, they will report the debt as " paid in full" to the credit bureaus. P.S This account is a charge off. Has anyone worked with MCM on a deal like this? Is there a catch? They claim to be registered certified on Nasdaq and have a B+ rating on BBB. They don't even seem interested in me paying off my balance of $ 5,144.86. I even asked them to take off the interest and let me pay off the original balance of $ 4,036.71 and they refused because they cant adjust the balance. My question is , if i pay the 50% off of $ 2,572 and its is reported as paid in full... will it still show that i paid only 50% of the debt? Will this affect my score like a 'settled in full" would?

[llecs]

Welcome to the forums!

I wouldn't bother with the reporting. In terms of charge-offs and collections, per FICO scoring, it doesn't matter at all if it says "paid collection" or "settled" or "settled for less than full". FICO scores each equally per these two types of baddies. In fact, per FICO scoring, it doesn't matter if it reports a balance or $0. FICO ignores the balance and scores on the mere presence of the reporting. In other words, it doesn't matter if you owe $0 or $10,000, the damage is the same in FICO-speak. You would not see a change in FICO score as it updates to $0.

What I would do, though, is send a PFD letter if unpaid. There are Example letters you can use in here. Be sure to DV first if you haven't done so.

A listing on the NASDAQ means they are in debt and other people have to own them in order to maintain cash flow or to expand. BBB means nothing. They can purchase extra to be listed as an Accredited Business and that alone increases their grade.

[RobertEG]

They are double-talking you.

There is no such thing as a current status reporting code of "Paid in Full."  A statement of Paid in Full in your CR is a comment showing a paid current status and the absence of a reporting code of paid for less.

When you settle a debt, whether paid for the full amount or settled for less than the full debt, the Current Status MUST be updated to one single, four-letter word.

"Paid."  That indicates satisfaction of the debt, not the terms under which you arrived at its satisfaction.

Paid indicates the debt is satisfied, and is accompanied by the reporting of $0 due.  So, of course, if you settle the debt, in whatever manner, they are making no concession by reporting Paid.  It is their obligation.

When a debt is paid ("setttled") for less than the full amount, that is recorded separately by the additional reporting of a Special Comment code to the CRA, indicating "Paid for less than the full amount."    "Paid in full" is thus inferred by a reporting of a current status of Paid, and the absence of a Special Comment of "paid for less than the full amount."

What you want is a specific statement that they will not report a Special Comment indicating that the debt was settled for less than the full amount.

That, in and of itself, is a negative comment in your file, indicating that you did not fully satisfy prior debt.  Not a glowing comment upon manual review of your CR.

Some on the site have additionally commented that FICO negatively scores such a special comment.  I cant speak to that from experience, but regardless, it is a comment that you dont want in your credit file.