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I have several collection accounts and charge offs, I have already started by sending out letters to the CA's offering to settle the debt in return for deleting the negative mark from my reports (PFD). I know the chances of getting exactly what I want from all of the CA's isn't going to happen. If a CA writes me back and flat out refuses to PFD. If that is indeed what happens would it be possible to negociate with them to update update the tradeline as paid with a $0 balance and not closed with a settlement in place.
I want to lesson the impact of the baddie as much as I can if I am not able to get a PFD.
@Anonymous wrote:
What they’re willing to do depends entirely on them. However, the only thing that will affect your score is having the tradeline paid and closed. The wording won’t affect your score one bit. Only in a review by a manual underwriter could the wording really matter, say if you are borderline for an approval and they’re looking through your reports - PIF looks better than settled, but that may or may not matter on a case-by-case basis.
Thank you, that eases my concerns.
Any credit account that contains a settlement on you cr is considered a serious derogatory and it will hold down your Fico score for the time it is present on your cr.As it ages the effect lessens over time.Having one serious derogatory removed from your cr out of many will have little effect on your credit score, but any derogatory removal is well worth it.GOOD LUCK...
@DIYcredit wrote:Any credit account that contains a settlement on you cr is considered a serious derogatory and it will hold down your Fico score for the time it is present on your cr.As it ages the effect lessens over time.Having one serious derogatory removed from your cr out of many will have little effect on your credit score, but any derogatory removal is well worth it.GOOD LUCK...
Thanks!
Just to make sure I am completely clear on all of this, when dealing with negative items on our CR's a complete removal is ideal. If we can't get a negative collection account removed then a closed with $0 balance is more favorable than a closed account with a settelment in the eyes of the CRA's.
If you discharge a debt either by payment if full or by a settlement for less, the current status is paid, and the creditor or debt collector must update the current balance to $0.
If they accept a settlement for less that discharges the debt, they have the option of additionally reporting that includes the special comment of paid/settled for less. Either Paid of Paid/settled for less is a non-delinquency status that ends the total period of delinquency, and thus thereafter permits the collection or CO to begin to age in scoring impact.
However, if they choose to include the special comment of settled for less, that informs others that you have a history of not paying the entire debt that you obligated. That is viewable by prospective future creditors, and is never a favorable comment upon a manual review.
It can effect their willingness to grant new credit, and is something that you should try to avoid.
You, can, as part of negotiation of any settlement on a debt, include the provision that they agree not to report any mention of settled for less to any CRAs. If they agree to that provision, it becomes a binding part of your payment contract, and your credit report will then only show paid, making it look the same as if you had paid the debt in full.
If you did not obtain agreement not to report settled for less in your settlement negotiations before paying the debt, you can still pursue good-will requests asking for change in status to show only paid, thus omitting any reference to settled for less.
@Anonymous wrote:
Not in the eyes of the bureaus - they just report, they don’t care. In order of best to worst, all things considered:
PFD
PIF/balance $0
Closed, settled/paid for less than original amount
Open/unpaid
Thank you, that is exactly what I wanted to know.
@RobertEG wrote:If you discharge a debt either by payment if full or by a settlement for less, the current status is paid, and the creditor or debt collector must update the current balance to $0.
If they accept a settlement for less that discharges the debt, they have the option of additionally reporting that includes the special comment of paid/settled for less. Either Paid of Paid/settled for less is a non-delinquency status that ends the total period of delinquency, and thus thereafter permits the collection or CO to begin to age in scoring impact.
However, if they choose to include the special comment of settled for less, that informs others that you have a history of not paying the entire debt that you obligated. That is viewable by prospective future creditors, and is never a favorable comment upon a manual review.
It can effect their willingness to grant new credit, and is something that you should try to avoid.
You, can, as part of negotiation of any settlement on a debt, include the provision that they agree not to report any mention of settled for less to any CRAs. If they agree to that provision, it becomes a binding part of your payment contract, and your credit report will then only show paid, making it look the same as if you had paid the debt in full.
If you did not obtain agreement not to report settled for less in your settlement negotiations before paying the debt, you can still pursue good-will requests asking for change in status to show only paid, thus omitting any reference to settled for less.
Thank you!
That is the very reason I was asking as I know not all CA's will do a PFD and I wanted to know what other considerations were available to ask for.