Help - North Start Location Services

[SM_NC]

I received a letter today from Northstar Location Services in regards to an outstanding debt with Honda Financial Services (a valid account that I have neglected to pay). The letter states that they will offer a hardship settlement at 50% of the original amount owed ($643 for a $1,287 Balance).

This is the first time this collection agency has contacted me. I just checked my report today, and Northstar is not appearing yet. Should I contact them and offer to settle if we agree on the fact that they should never report this item in my credit report? if so, how should I proceed?

I am trying to avoid getting any new negative information on my credit report as I am working on getting it cleaned up. Any help will be deeply appreciated.

Thanks!

[SM_NC]

Just a follow up - 

The CA has not reported anything on my CR. I called Honda Financial Services(OC) and they verified the Northstar Location Services (CA) was in fact handling the account for them. I settled for 50% of the original amount owed with Northstar.

They verified that no additional entry will go into my credit report. The only thing that will update is my existing trade line with Honda Financial Services, it will update from a $1,287 outstanding balance to $0.

I think I've took the right course of action. Do any of you disagree?

[llecs]

If the debt is new then calling and taking care of it right away is the best option, IMO. Chances are the CA never would have reported anyway since the debt is assinged and the OC reports. When it updates, make sure the OC doesn't report anything like "settled", "paid for less than full", or "paid charge-off". They can report that, but all of those comments are score-damaging. If that happens, then start firing of GW letters.

[SM_NC]

Thanks llecs. I will keep an eye out to see how the OC reports it.