Debt Negotiation - Settlement with Amex

[Anonymous]

Hi, I am trying to rebuild my credit score. I have paid off most of my credit cards, however, still have a large debt with AMEX for $9800. They have offered us a 50% settlement which we an accept but are concerned that they will mark our account "Paid as Agreed" with all credit report agencies. We have read that this will actually drop our score even more. Does anyone have any advice? We are negotiating with AMEX directly telling them we would accept the settlement if they would remove all the negative information, "comnplete removal". We also read that Paid with No late payments" is ok. Any thoughts? Thanks. Dave

[My_dog_FICO]

Dave,

  If they report that your payments are in good standing and that the account is not in collections or past due, and they don't report any late payments - then keep it on your report.  No negative infomation actually helps your FICO because it adds age to your CR.  Also, if they report it in good standing, you may be able to apply for a AMEX again in the future.

[Anonymous]

Well you have to ask yourself, is a slight decrease in your score, worth $9,800?   50% off is a great deal.  that's $4.900.   Is the account open or closed?   What is your financiall situation?  If it's open can you get them to knock down the interest rate and be faithful to  larger monthly payments to keep it active.  

If it's closed who closed it?   If Amex did then I would seriously consider the settlement,  that's a savings of almost $5,000.  and you can make up the score difference down the road.

[SmartCookie]

They would most likely note it as 'legally settled for less than full' which is the same as a PIF but if anyone is doing a manual review... they will read that and it isn't as favorable.

Read up on PFD letters.  Maybe they will take that same settlement and delete the info... or maybe you might add a small bit to it...

If this account was not very old and/or had lots of more recent derogs all over it... I would PFD. 

If the account and derogs are old I would not want a PFD and I would take the settlement.  In this instance, you can still request that they send you something in writing stating that upon payment, your account will be updated as legally paid in full etc.   You can even take it farther asking them to delete derog info upon payment.  Consider and try all of your options before you pay while you have negotiating room.

[Anonymous]

Thanks for the replies. The current status is the remarks on our credit reports are that it is over 120 days late; was in collection (though it went back to AMEX after we sent letter contesting the claim). AMEX has offered the 50% settlement, but will not budge in terms of removing negative re comments from credit reports such as late notations. They will only mark as "Paid as agreed", and are now threatening to do an asset search if we don't settle. I would like to settle. I just don't want to do my scores more harm than good. Any thoughts? Dave

[Anonymous]

One other note. The account was closed by AMEX. They also closed a second AMEX account I had that was paid and up to date. They have offered me a new card if I paid in full, which I can't, with a ridiculous rate of like 24% interest rate.

[fishbjc]

Those dogs at AMEX aren't fun to deal with.  For a savings of $4900, I'd take the credit hit.  Like the others said..make up the score later.  Keep us updated on this please.

AMEX closed dh account as well, but I immediately paid them in full.  DH had a big job issue with last company, he was in sales and they really stuck it to him, so the AMEX went into default because of loss of revenue.   We did have about $1200 on the 'roll over' plan with a balance now of $700.

I'll look at his cr to see what it says.

[fishbjc]

Credit Card Amex Status as of November 2007

Date opened [?] May, 2002 Date of last activity [?] Nov, 2007 Largest past balance [?] $1,199 Credit Type [?] Open Account Account holder [?] Individual Scheduled payment amount [?] $0

Descriptions [?]

• Account closed by credit grantor
• Credit Card

No contact information provided by Equifax

Balance [?] Current Status [?] Past Due Amount [?] $732 OK Not on Record Seven year payment history [?] 30 days late 0 times 60 days late 0 times 90+ days late 0 timesCredit Card Amex Status as of November 2007

Date opened [?] May, 2002 Date of last activity [?] Nov, 2007 Largest past balance [?] $1,199 Credit Type [?] Open Account Account holder [?] Individual Scheduled payment amount [?] $0

Descriptions [?]

• Account closed by credit grantor
• Credit Card

No contact information provided by Equifax

Balance [?] Current Status [?] Past Due Amount [?] $732 OK Not on Record Seven year payment history [?] 30 days late 0 times 60 days late 0 times 90+ days late 0 times

[Anonymous]

If I did agree to settle and accept "paid as agreed", any idea how much this will hurt my credit score?

[SmartCookie]

It will help it because it will 0 out the account and update it to paid.  What will help it more is if they remove all derog info at the same time.  If they will not, I would keep trying for a PFD. 

The lates will look worse than the 'settled legally in full' will on a manual review.