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CO credit card - PIF or settle?

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CO credit card - PIF or settle?

On a charged off credit card, is there any difference between PIF and paying a lower settlement amount? For example, it was CO for $2500 but the CC company agreed to settle for $1500 - would PIF be better for FICO score than settlement?

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Message 1 of 7
6 REPLIES 6
Valued Contributor

Re: CO credit card - PIF or settle?

Scorewise, whether you PIF or settle makes absolutely no difference. All that matters is that the chargeoff is updated to reflect a $0 balance upon receipt of payment.

The only time it may matter a bit is upon the manual review of your reports by lenders as a settled account is generally noted as such in the comments. In that case, PIF will always look better than settled for less.
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Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
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Message 2 of 7
New Member

Re: CO credit card - PIF or settle?

What is a PIF?  I recently agreed to pay a settlement with American Express as full settlement of balalnced owed which I understood as zero

they changed my CO ( charge off ) to a FP ( failure to pay) and Im not sure if thats worse or better or the same? any thoughts

Message 3 of 7
Valued Contributor

Re: CO credit card - PIF or settle?


@Hope4menow wrote:

What is a PIF?  I recently agreed to pay a settlement with American Express as full settlement of balalnced owed which I understood as zero

they changed my CO ( charge off ) to a FP ( failure to pay) and Im not sure if thats worse or better or the same? any thoughts


PIF = Paid In Full

 

The account is still considered a charge-off and will be viewed as such by FICO.   FP and CO in the payment history are just status indicators provided by the lender -- some will use CO, others FP for all months the debt remained unpaid.

 

Have you fully paid the settlement amount?  If so, have they updated the balance to $0? 

 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 10/01/2019: EX 747 ✦ EQ 728 ✦ TU 756
Current FICO 9s | 10/01/2019: EX 765 ✦ EQ 765 ✦ TU 758
Highest FICO-8 Ever | 10/2018: 780 [on dirty report]

2019 Goal Score | 760s


My AAOA: 2.8 years not incl. AU / 2.11 years incl. AU
My AoOA: 6.8 years not incl. AU / 8.8 years incl. AU
Report Status: Clean

Tending my Garden til 2/2020


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 4 of 7
New Member

Re: CO credit card - PIF or settle?

Hello I did pay the amount we agreed too. And I got the letter from them American express.

It reads: this letter confirms you agree to pay settlement amount listed below as full settlement of the balanced owed.

but now that I re read it several times the second half of the letter reads: upon receipt and clearance of payment for settlement amount ,no further attempts will be made to collect the remaining balance. So I'm beginning to think I was too quick to read first half of the letter because it contradicits itself?? what do you think?

Then the second letter I recvd as the :debt release reads: We recvd your payment with this payment you have  now completed the terms of the settlement. No further attempts will be made to collect the remaining balance. (so now they are implying there is a balance but won't collect??)

So in essence my payment made no difference thus far in my credit reporting. The one other thing they did was change all the CO that were on my account to all FP/ failure to pay and they changed the balance owed to amount remaining. So now Im trying to figure out how to proceed Do I try calling the american express peope again and ask them to honor the agreement on the first half of the letter or am I screwed? Not sure if it owuld helo me to make copies and send to credit bureau to dispute that AE  said full settlement of the balance owed. (in first half of letter)

I have done tons of letter writing and back and forth and have gotten many items removed and cleared. This is the last hurdle. any advice. trying to figure out what might make the best effort

 

Message 5 of 7
Established Contributor

Re: CO credit card - PIF or settle?

On that type of amount I would PIF, if you settled for $1500 then the rest of that would be coming out of your tax return. Anything under a $600 difference from what I have read and you are clear from having to make up the difference.


Message 6 of 7
Valued Member

Re: CO credit card - PIF or settle?

 


@glockr wrote:

On a charged off credit card, is there any difference between PIF and paying a lower settlement amount? For example, it was CO for $2500 but the CC company agreed to settle for $1500 - would PIF be better for FICO score than settlement?


Can we go back a couple steps and know how old the charge off is? I am assuming it's a somewhat new charge off since it sounds like you are negotiating with the credit card company.

Message 7 of 7
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