Settle or Pay in full

Anonymous · ‎03-28-2017

I have an old charged off Macys account. My mortgage lender talked with the bureau and they said for me to take care of this in order to get some points. Should I settle or pay in full? My lender said it shouldn't matter. I need advise thought on which will affect my credit most....Settling or paying in full

Anonymous · ‎03-28-2017

If its a charge off, the damage is already done. The best thing you can do is get the furniture to report a zero balance. They may leave notes saying " Paid, settled for less owed" but if your lender does not care then settle and save money. Its weird that a Lender is directly talking to the 3B but then again im not a lender and dont really know if they do or do not. The lender is who approves you. Are you using 1 lender or are you going through a broker?

Anonymous · ‎03-28-2017

My lender is trying to move mountains in order for my credit to go up so she can get us approved for a mortgage. We know her personally. I do want to save money but not sure if settling will lower my chances of more points.

Anonymous · ‎03-28-2017

A lot of lenders have relationships with their underwritters and she should know whether or not a paid for less note will make things harder for you. How much is the debt? I have settled a defaulted car loan 8k down to 3k and they will send me 1099 and put notes paid for less. IDK cause thats 8K worth of debt that is now a zero balance. I had another 2000 balance that i settled for 400 and then another 450 to 200ish. All 3 are going to put notes saying paid for less but thats okay with me because that chunked off over 10k in debt thats now zero balances. Will the lenders or underwritters care about that notes... IDK honestly but if youre wanting to go FHA then dont worry about those notes IMO and do what you can to save more money

Anonymous · ‎03-28-2017

It was my understanding that the negative tradeline needed to be removed to gain points, that just updating to $0 won't increase the score. If you are able to settle then write GW letters to have them remove the negative CO completely, THAT would then allow you to gain points from settling for less, unless I am mistaken. (Which is completely possible, any knowledge I have is from reading LOTS of posts here).

Anonymous · ‎03-28-2017

The debt is only $500. It is costing me 163% utilization. Experian told my lender that this would get me 60 points if I paid it. Now I know that sounds ridiculous, and I even questioned this several times. My lender just said to trust what she said because she has seen this happen. She said Experian never mentioned having it removed, just paying it off

Anonymous · ‎03-28-2017

I have asked for a paid deletion but they won't do it

Anonymous · ‎03-28-2017

If it is skewing your utilization, paying it should yeild higher scores, but there is no way to know how much. I would try and negotiate a PFD if you have the $500 to do so.

Anonymous · ‎03-28-2017

How do I get a deletion? I asked Macys and the Collection agency and both said they couldn't delete

Anonymous · ‎03-28-2017

@Anonymous wrote:
How do I get a deletion? I asked Macys and the Collection agency and both said they couldn't delete

If they wont do a pay for delete after multiple attempts, you'd have to switch to the goodwill method, which would only work should you pay the amount in full.