topic Re: Settlement in General Credit Topics

Settlement

hanify2001 — Wed, 26 Oct 2016 03:52:28 GMT

How will settling an installment loan that is 60 days late for less than I owe affect my score?

Re: Settlement

Anonymous — Wed, 26 Oct 2016 23:15:41 GMT

What is your scores now and do you have any other baddies?

Re: Settlement

hanify2001 — Thu, 27 Oct 2016 16:59:51 GMT

Experian is 626. I have two other late payments and a lot of on time accounts.

Re: Settlement

Anonymous — Thu, 27 Oct 2016 17:04:53 GMT

On a manual review it will look very bad. Lenders will be very nervous lending you money/credit when they see you were late and then settled for less costing the creditor money.

Re: Settlement

hanify2004 — Sat, 29 Oct 2016 06:28:47 GMT

A manual review would be what? Mortgage? How would a settlement affect my score other than a manual review?

Re: Settlement

Anonymous — Sat, 29 Oct 2016 13:37:41 GMT

Manual review for any type of credit product. MANY times when an app goes to 7-10 day message it's a manual review. Settle for less won't impact your scores other than the lates.

Re: Settlement

RobertEG — Sat, 29 Oct 2016 16:48:13 GMT

If you settle for less, the creditor will update the account to show closed, $0 balance.

That will thereafter terminate any increased level of delinquency, but the 60-late will continue to affect scoring.

The reporting of paid, $0 balance will thereafter terminate any continued reporting of account delinquency, thus preventing any increased negative scoring effect.

The creditor has the option, when they accept less than the full amount of the debt, to additionally report under a special comment that it was settled for less.

That special comment, as mentioned, is potentially negative in any manual review, as it makes of record the fact that you now have a history of not having paid the full debt that you obligated.

You can, as part of negotiating a settlement for less, include as a condition that the creditor not report any reference to the account having been settled for less, thus making the account appear in any manual review the same as if you had paid in full.