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@Mrsg714 wrote:
I received an alert today that a new collection appeared. After pouring over my credit reports I realized that it was an old collection from Directv. The collection was updated by the CA. I called Transworld Systems and was advised that they could settle for a little over half. I'm planning on applying for a mortgage soon so I don't want the collection to keep updating.
If I settle the acct and it updates as settled for less than full will this hurt my score?
The score hit has already occured with the new CA being reported, settling it now isnt going to give you any bigger score ding. I would attempt the PFD with the CA or try to work with the OC on getting it recalled and then pay them off.
The creditor or debt collector can, at their discretion, additionally add a special comment to their reporting stating that it was paid for less than the full amount.
Its signficacance is that if a creditor does a manual review, that comment advises them that you have, in the past, not paid the entire debt that you obligated.
That represents a loss by the former credtior in their dealings with you. That is never a favorable comment when making a lending decision.
It is not so much a scoring issue as it is a manual review issue. If, when settling, you can obtain agreement that they not add any special comments stating paid or settled for less, that is desirable. The debt will then appear in your credit report the same as if it had been paid in full.
Thanks for the replies. I believe they will list the account as settled and not paid in full. I'm going to have to pay in full. I don't want to risk a mortgage over this.
If you are currently in a loan app process, I would first ask the loan officer if paying for less would affect their lending decision.
Settlement still discharges the debt, which is usually their primary concern, not the terms of your payment.
@Mrsg714 wrote:Thanks for the replies. I believe they will list the account as settled and not paid in full. I'm going to have to pay in full. I don't want to risk a mortgage over this.
i would do as gdale suggested and ask them to delete the account when paid (pfd). now is your chance!
I have not applied for the mortgage yet. I was going to app in October. The original plan was to hold off on the collections until contacting a lender to see what they say. I received an alert this morning from Fico telling me a new collection acct appeared. It wasn't a new collection, but rather the old collection that was already on there. Any idea why the old collection would prompt a new alert?
@Sbrooks1 wrote:
New CA , when they sell to a new CA it appears new on CR !!
According to the alert it is the same CA.