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She has to pay it somehow. They chargeoff will destroy her credit and even if she wants to make payments after chargeoff the negative mark will stay for 7 years. Good luck
@Anonymous wrote:
Most likely talking to the wrong department. Tell her to call and say she is interested in their Financial Hardship program. Many credit cars companies will close the account, freeze the balance from accruing interest and will split payments over 24-48 months.
A collection is worse than a charge off when it comes to credit. I still had ‘decent’ credit with a 3 year old charge off on my credit. When I got a collection it dropped it by 80 or so pts.
Please post accurate information fellow poster. A charged-off account that has a past-due balance is worse than a charged-off account that has been paid or settled. Meanwhile, the balance associated with a collection account is not considered in FICO's scoring models. That's why paying off a collection doesn't actually result in a higher credit score. There's no util considered in a collection unlike a CO account. Your CO was aged whereas your collection was fresh and it hit you hard for being new.
@FireMedic1 wrote:
@Anonymous wrote:
Most likely talking to the wrong department. Tell her to call and say she is interested in their Financial Hardship program. Many credit cars companies will close the account, freeze the balance from accruing interest and will split payments over 24-48 months.
A collection is worse than a charge off when it comes to credit. I still had ‘decent’ credit with a 3 year old charge off on my credit. When I got a collection it dropped it by 80 or so pts.Please post accurate information fellow poster. A charged-off account that has a past-due balance is worse than a charged-off account that has been paid or settled. Meanwhile, the balance associated with a collection account is not considered in FICO's scoring models. That's why paying off a collection doesn't actually result in a higher credit score. There's no util considered in a collection unlike a CO account. Your CO was aged whereas your collection was fresh and it hit you hard for being new.
I'm encouraging the OP not to allow this to go to collections as it`ll do even further damage.
@Anonymous wrote:
@FireMedic1 wrote:
@Anonymous wrote:
Most likely talking to the wrong department. Tell her to call and say she is interested in their Financial Hardship program. Many credit cars companies will close the account, freeze the balance from accruing interest and will split payments over 24-48 months.
A collection is worse than a charge off when it comes to credit. I still had ‘decent’ credit with a 3 year old charge off on my credit. When I got a collection it dropped it by 80 or so pts.Please post accurate information fellow poster. A charged-off account that has a past-due balance is worse than a charged-off account that has been paid or settled. Meanwhile, the balance associated with a collection account is not considered in FICO's scoring models. That's why paying off a collection doesn't actually result in a higher credit score. There's no util considered in a collection unlike a CO account. Your CO was aged whereas your collection was fresh and it hit you hard for being new.
I'm encouraging the OP not to allow this to go to collections as it`ll do even further damage.
The account hasn't even made it to charge off yet. Nor any talk about collections. As Remmy said. Its already doing damage now. We try to give accurate information. If we dont know something. We can ping someone that will know. Your statement in red was not accurate. We dont want to lead new posters or any posters into a wrong direction/decision. Credit is a serious matter. I only pointed this out as a learning curve for your future posting on the forum. I can ping @Remedios and she can tell you how its done here. I'm not getting on you. You learned something new now that you didnt know before. Run with it and help others.
A collection related to CO is a separate item on CR.
It will report with the date collection account was open, hence making delinquency "appear" more recent. That wont affect the removal date, which is based on DOFD, but it will cause additional score drop.
Collection amount may not match the amount on CO, as there might be fees and interest accumulating. That's one of the most common reasons people believe dispute is in order when it isnt.
There is no "better" or "worse". Collection account is just adding extra salt to the wound.
The only scoring "reward" for paying a CO or collection is that updates stop and "time since last negative" extends.
In this particular case scenario, the sister needs to make all past due payments, plus current payment and any amount over the limit if fees and interest have pushed past it.
A lot of times, creditors will not make payment arrangements while card is still technically open (though not usable) because the payment arrangements have already been broken.
When we accept the terms, we agree to pay.
The account wont be "sold" to external collection agency right away. If they do that, they lose percentage of any future payment, but their attempts at collecting will be more aggressive than they are right now.
She should make every effort to bring it to current, then close to preserve terms and allow to negotiate a payment plan.
The only reason this card is still "open" is because people are more likely to pay while it is, so let that work to her advantage. The damage is already done, now it's just damage control.
Things can get a lot worse for her.
If she needs to borrow money to make these 5-6 minimum payments, it's a lot better option than wage garnishment or bank account levy.
I sincerely hope she can get it figured out rather quickly