topic Settled Debt and Future Amex Applications in Rebuilding Your Credit

Settled Debt and Future Amex Applications

alex0956 — Tue, 04 Mar 2025 15:18:34 GMT

I’m looking for advice about a debt settlement and how it might affect my future chances of getting approved for an American Express card.

I had a balance of about $3K with Amex, which was sent to collections. I’ve paid it down to about $2.4K, and I’m thinking about negotiating a settlement for 30% of the balance. The settlement is contingent on Amex removing the debt from my credit report (pay for delete).

This language is on the page re: settling the debt with the collector:

"Important Settlement Information:

Please be advised that American Express will consider your settlement in evaluation of any future applications.
Additionally American Express will continue to report your account to the credit reporting agencies based on the status of the account in accordance with our standard credit reporting practices.
Once you complete the settlement payment plan, American Express will report your account settled with zero balance.
If you have questions about American Express credit reporting practices, please contact 1-800-874-2717."

The problem is, I’d like to apply for an Amex card in the future, but I’m worried that settling the debt will hurt my chances of approval down the line. Has anyone dealt with this? Does a settled account significantly impact Amex credit applications? Thanks for any insight!

Re: Settled Debt and Future Amex Applications

JoeRockhead — Tue, 04 Mar 2025 17:08:08 GMT

@alex0956 wrote:
I’m looking for advice about a debt settlement and how it might affect my future chances of getting approved for an American Express card.
I had a balance of about $3K with Amex, which was sent to collections. I’ve paid it down to about $2.4K, and I’m thinking about negotiating a settlement for 30% of the balance. The settlement is contingent on Amex removing the debt from my credit report (pay for delete).

This language is on the page re: settling the debt with the collector:
"Important Settlement Information:
Please be advised that American Express will consider your settlement in evaluation of any future applications.
Additionally American Express will continue to report your account to the credit reporting agencies based on the status of the account in accordance with our standard credit reporting practices.
Once you complete the settlement payment plan, American Express will report your account settled with zero balance.
If you have questions about American Express credit reporting practices, please contact 1-800-874-2717."
The problem is, I’d like to apply for an Amex card in the future, but I’m worried that settling the debt will hurt my chances of approval down the line. Has anyone dealt with this? Does a settled account significantly impact Amex credit applications? Thanks for any insight!

Amex isn't going to do a PFD. They'll report it a zero balance/settled for less. They'll also have you in a time out. How long it will be before they approve you again is generally dependent on how much money they lost on you. You'll just have to keep trying their pre-approvals until they stop listing previous relationship as a denial reason. It could be a minimum of 1 year before they let you back in.

If you don't pay them, it could be much, much longer.

Re: Settled Debt and Future Amex Applications

saltlakere — Wed, 12 Mar 2025 05:12:45 GMT

Amex has a good memory. I suggest you seek payment arrangements and possibly re-open the account rather than settle. If your finances don't allow that and settlement is the best option, you're going to need a different lender in the future. I imagine your credit has suffered with the recent lates on this account. Is this the only one in trouble or are there more? Another question is why are you behind? If it's a temporary circumstance, you may be able to negotiate a hardship allowance and reinstate this account.

Re: Settled Debt and Future Amex Applications

Chief2177 — Mon, 07 Jul 2025 19:55:42 GMT

From my understanding, there is no set time as to when Amex will open the gate to you again. In fact, I included them in a bankruptcy 20 years ago. While the bankruptcy has fell off my credit report long ago, somehow they still remember that I burned them. How do I know this? I applied for one of their accounts about 3 months ago and received a letter stating that they were unable to approve me for an account due to a previous negative relationship. I guess that goes to show you that some just never forget.

Re: Settled Debt and Future Amex Applications

sjt — Thu, 10 Jul 2025 17:24:01 GMT

Amex and original creditors do not do PFD. If you settle or pay, it indicates that the account is paid or settled, has a zero balance owing, brings your account to a current status, and stops the monthly reporting of the delinquency. That will increase your score.

Payment in full will take you off their blacklist. You may want to check if American Express can offer you the Optima Card or reinstate your account.