@Anonymous wrote:
@MarineVietVet wrote:
@Anonymous wrote:
Has anyone experience in settling debt without going into collections? I have a number of business cards, (co-signed for a business, which failed) with multiple late payments, some of them current, and some of them 60 to 90 days late. I do not want to get these into collections, due to the impact on the Credit score, yet I am unable to pay all of the cards. Can I negotaite to settle a portion of the debt? Has anyone done it and if so, how to do it? Does engaging a Bankruptcy lawyer to negotiate, help with the situation?
If settlements can be done, how much % of the debt, can I expect?
ThanksA settled account is looked at the same as a charge off and that is not a good thing. A charge-off will remain in your CR for 7 1/2 years from the DOFD. A collection remains for the same amount of time. So the damage is the same for either action.
From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802
You can do the same thing with hard work.
This is not correct information. A settled account or CO is not as FICO adverse as a collection account. Any account that remains only in the "ACCOUNTS" section will always fair better. The only things worse than a collection is PR's (BK, etc.).
If you can settle the accounts without going to outside collections, by all means you are doing yourself a favor. And the more time that passes the less impact they have. In addition, you might get lucky down the road with GW.
I will give you a real world example of the difference:
Midland Credit Management had an old AT&T account. It was reported as an outside collection on TU & EX, but as an "ACCOUNT" on EQ that was 120 days late and CO. The result, with this reported as my last derog was 806 on EQ and 706 on TU and even lower on EX. I got the account deleted first from EX and TU (the collection) and those scores jumped to 802 and 780 respectively. When I finally got the adverse account deleted from EQ, my score went from 806 to 809, only 3 points.
As you can see, having a reported collection is much more adverse than as an account. While a LO review may in fact treat them upon review as similar, FICO will not.
Hi John,
I was referring to the amount of time a settled account stays on your report vs. a collection. On a post dated 10/21/09 llecs said: Per FICO scoring, a settled account equals a charge-off. Therefore both a CO and a collection will stay reported for 7.5 years from the DOFD unless removed early. In that sense the damage is the same for either action. So my statement was correct; I just didn't make it clear enough I guess. 
marinevietvet wrote:I was referring to the amount of time a settled account stays on your report vs. a collection. On a post dated 10/21/09 llecs said: Per FICO scoring, a settled account equals a charge-off. Therefore both a CO and a collection will stay reported for 7.5 years from the DOFD unless removed early. In that sense the damage is the same for either action. So my statement was correct; I just didn't make it clear enough I guess.
Just to clarify any past comments, and I don't recall the post, I was probably speaking in the context of settled vs. CO'd OC accounts. And I do want to amend that I really don't know if they are equalled. I've heard that the damage is similar and also heard that it is equal. I'd treat both equally when considering repair. In the scheme of things it really doesn't matter if the goal is to get it off or cleaned.
Length of time they report is the same, but the score damage of a CA is different than the score damage of an OC. For starters, CO accounts can factor positively into your history making the damage appear less, vs a CA in that nothing concerning a reporting CA can ever help your score. CO CC accounts, for example, can actually help your util and thus help your score, depending on the situation. There are other viariables too.
@llecs wrote:
@MarineVietVet wrote:I was referring to the amount of time a settled account stays on your report vs. a collection. On a post dated 10/21/09 llecs said: Per FICO scoring, a settled account equals a charge-off. Therefore both a CO and a collection will stay reported for 7.5 years from the DOFD unless removed early. In that sense the damage is the same for either action. So my statement was correct; I just didn't make it clear enough I guess.
Just to clarify any past comments, and I don't recall the post, I was probably speaking in the context of settled vs. CO'd OC accounts. And I do want to amend that I really don't know if they are equalled. I've heard that the damage is similar and also heard that it is equal. I'd treat both equally when considering repair. In the scheme of things it really doesn't matter if the goal is to get it off or cleaned.
Length of time they report is the same, but the score damage of a CA is different than the score damage of an OC. For starters, CO accounts can factor positively into your history making the damage appear less, vs a CA in that nothing concerning a reporting CA can ever help your score. CO CC accounts, for example, can actually help your util and thus help your score, depending on the situation. There are other viariables too.
That's all I was saying. That the length of reporting time is the same.
It seems like no one is abolutely sure about this question. But such is the FICO creature. BTW here is the post from 10/21/09 and your response:
Speedwagon:
Before I found these lovely forums, I was working with Debt Settlement USA on some charge off accounts. They were really just very, very late accounts until I signed up with DSUSA, when they basically told me they can't do anything unless the accounts are not being paid. So that resulted in them all going to CO status.
In June of this year, DSUSA got me a settlement on a Citibank account I had. The terms of the settlement offer was that the CA stated “also confirm that no action has been taken against you or your credit rating by this agency.” Which is true, the CA does not appear on my report. However, they also stated “After settlement of your account, Citibank will update your credit file with TU, Ex, and Eq to reflect a settled in full account status and zero balance.” I pulled my EQ report 4 days ago, and as far as I can tell, it doesn't appear any differently. It shows as a current status: charge off, with a balance of $1856(which is what the settlement offer letter was for as well). There is a CO up to the August 2009 block on the report as well. Amount past due shows $0
How do I go about handling this? Am I not understanding what is reported here, or are they reporting wrong?
llecs:
If Citi changes the status to "settled", your score will not improve. Per FICO scoring, settled accounts equals a charge-off. Depending on the age of this TL in relation to your AAoA, either send a GW asking them to remove the lates, CO status, settled status (if they ever change it), etc. or send a GW requesting deletion.