topic Re: Settling a Net Credit Account with lates-impact to score? in Understanding FICO® Scoring

Settling a Net Credit Account with lates-impact to score?

Treesa — Thu, 18 Jan 2018 19:13:37 GMT

I borrowed $3400 from Net Credit which I began to regret right away. The APR is 99% but I had the plan to pay off quickly which didn't happen as my husband was then hurt at work and put on Worker's Comp...decreased income. I am working with American Credit Card Solutions to settle this account only. It is currently 90 days late. I could not keep up with the high payments only to have a very small portion go towards principal. My score dropped 50 points. How will this account being settled impact my score? Better to have it paid and settled than oweing a late balance I assume. All other CC's, auto loans and mortgage loan are postive status no lates. I would appreciate any guidance.

Re: Settling a Net Credit Account with lates-impact to score?

Revelate — Fri, 19 Jan 2018 07:53:32 GMT

If you can't afford it then yes take the settlement as it's either that or a BK.

The damage is done on the 90D late already, I'm not familiar with the account and there isn't much data on debt settlments but it may just be a notation on the tradeline in which case I wouldn't worry about it.

Finances > FICO.

Re: Settling a Net Credit Account with lates-impact to score?

RobertEG — Fri, 19 Jan 2018 18:35:07 GMT

It's current status as 90--late changes each month.

They can report increased level of delinquency, thus further damaging your score.

Once the loan reaches 120+ days late, it might be charged-off, adding the reporting of a CO.

Additonally, they can refer or sell to a debt collector at any time, which could result in the addition of a collection.

Discharging the debt, either pay payment in full or by obtaining a settlement for less, will terminate any delinquency status.

Can you pay in full, or will you only be willing to offer a settlement for less?

In either case, any payment offer should be preceded by an attempt to secure removal of reported derogs, or promise not to report additional derogs. Check out the forums for making settlement or pay for deletion offers before simply paying.