Collections Not On Credit Report

[girlindebt]

I have a couple of credit card accounts that are reported as charge-offs on my credit report.  However, none are currently denoted as "collections" accounts from a reporting perspective.  They are still reporting the balance monthly, which is hitting my utilization.  These are sizable debts ($5k+) and fairly recent charge-offs (less than 2 years) so the SOL is well within the limit.

I have received settlement offers via mail from:

• American Express Global Collections (American Express)
• Client Services Incorporated (Chase)

My question is IF I accept their settlement offers, will they then turn around and report them as paid-settled "collection" accounts as soon as I pay?

I'm trying to avoid that from occuring and just take the hit on the charge-offs with a zero balance.  I'm afraid if I pay, they will report the zero balance on the charge-off, but then turn around a create a collection record on the report which would kill my score even more.

Because they aren't reporting these as "collections" there really isn't a PFD aspect here.  Asking them to wipe the charge-off is probably impossible given I'm looking to settle.

I did the FICO score simulator and if I get these balances down to $0, my score would potentially jump 50-75 points since my utilization would drop significantly.  What I'm afraid of is that potential increase would be negated if they each created a "collection" record after the fact...maybe even more hurtful to my score.  I want to pay, but also want to do what is most advantageous from a scoring perspective.

Anyone have experience or thoughts regarding my question?  Thanks.

[gdale6]

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@girlindebt wrote:

I have a couple of credit card accounts that are reported as charge-offs on my credit report.  However, none are currently denoted as "collections" accounts from a reporting perspective.  They are still reporting the balance monthly, which is hitting my utilizing.  These are sizable debts ($5k+) and fairly recent charge-offs (less than 2 years) so the SOL is well within the limit.

I have received settlement offers via mail from:

• American Express Global Collections (American Express)
• Client Services Incorporated (Chase)

My question is IF I accept their settlement offers, will they then turn around and report them as paid-settled "collection" accounts as soon as I pay?

I'm trying to avoid that from occuring and just take the hit on the charge-offs with a zero balance.  I'm afraid if I pay, they will report the zero balance on the charge-off, but then turn around a create a collection record on the report which would kill my score even more.

Because they aren't reporting these as "collections" there really isn't a PFD aspect here.  Asking them to wipe the charge-off is probably impossible given I'm looking to settle.  

Anyone have experience or thoughts regarding my question?  Thanks.

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You need to make deal with them on the offer that if you pay it they wont report it. The OCs are not going to wipe away the CO so I would not even ask for it, settling will stop the monthly updating and allow your Fico to begin to recover. Welcome to the board

[Anonymous]

If you oay them that one acct will go to 'paid as agreed" or "settled" with a $0 balance. If you dont amex and chase will eventuslly package your acct with others and sell it to the highest bidder. This will result in these accts showing transferred or sold with a $0 balance then the buyer will start collections accts for the balance + their version of interest. If you can settle now then do it. Waiting on a debt buyer will hurt more.

[girlindebt]

First, thank you for the prompt replies.

Are American Express Global Collections and Client Services Inc internally collection companies (for AMEX and Chase) meaning they don't report the debt as a "collection" unlike say Portfolio Recovery or Midland?

I guess I'm trying to undestand what exactly will be reported if I accept their settlement offers.  I understand I could specificy that as a term of the settlement, but what is their default reporting if I just accept the settlement as is?

Thanks again.

[Anonymous]

They are most likely their internsl collection agencies. I had a similar situation with usaa and merrick when i started rebuilding. I actually paid and dealed with the collection company but usaa and merrick still owned the debt so that one charged off acct is what they updated.

[RobertEG]

A collection is reported by a debt collector.

In almost all cases, a debt collector is a third-party other than the original creditor.

However, there is an exception.

The FDCPA definition of a debt collector also includes the original creditor ONLY IF they use a name other than their own, and thus suggests they are a third party.  See FDCPA 803(6).

If you have an Amex card and you receive communications from their internal collection department under the name American Express Global Collections, that is not a name that suggests they are a third party, and thus they would not be a debt collector.

They would not report their attempts to collect as a formal "collection" in your credit report.

[girlindebt]

Thanks again for the replies.  If I interprete the response, it could go either way.  They may just report it as a paid charge off and no collection record - OR - there could be a collection record created once I settle.

I'm obviously wanted it to stay as a paid charge-off and no collection record.  Basically, keep it as it appears now on my CR but with a zero balance.

Short of actually calling them and asking, anyone else been in my specific situation?

[Zizou615]

If you haven't done anything with Credit Services Inc, sit tight.  I accepted a written settlement offer I ran by both a mortgage lender and credit repair agency--yesterday I made the final payment and today I cannot log into their portal (assuming they closed my account).  I'm waiting to see what happens with reporting, but the simulations done for me indicate this will be a big boost for me.

Since it has been a few months, did you ever settle or do anything?  If so, what happened?