Helping friend with her credit-quick question

[mymoneynow]

I am helping a friend this morning with her credit. She only has 4 accts, 3 in good standing-

Cap One CC, Pers Loan at CU, Auto Loan at CU-All current, never late.

The baddie- Victoria Secret-WFNNB- $586 Bal, $285 Past due- 120 days past due. This one is killing her score!

She paid  monthly payment until 07/08- She ran into hard times and could not pay all her bills, so she quit paying on this one. They have been adding late fee of $20 each month since 07/08.

Question-  At this point, should she call to inquire what type of arrangement they can offer her as far as deleting the late fees on the account, if she PIF minus the late fees (of course she would ask for the arrangement in writing), or should she send the PFD letter requesting the late fees be deleted, then she can PIFFD?  

[llecs]

If I had the account, I would do the following:

1) I'd check the age and compare it to my other accounts. If older than my average age, then I would not want it deleted at all.

2) Whether or not I wanted it deleted, I would pay the past due amount ASAP via the phone or internet. It doesn't appear CO'd yet. Once it does, then it will drop the score even more and I'd be at a higher risk for the account going to a CA. I would do everything to prevent a CA from reporting.

3) After I paid it, then I would expect a significant score increase. In all likelihood, FICO is reading the account as maxed out and paying the past due may fix that. If CO'd, then I would then send a PFD if newer or just pay it if older. If older, maybe I would modify a PFD to get them to remove the lates in exchange for deletion of the lates.

4) If older, and after I paid it if a modified PFD did not work out prior to paying it, then I would GW them. If the TL is still open, then I would probably delay a GW until after the year to continue a good history with them and to GW later expressing that short,good history.

Message Edited by llecs on 11-12-2008 12:41 PM

[mymoneynow]

Thanks for the advice. She called OC (they had acct in their inhouse collections dept), talked with a very helpful lady who was very understanding of her past problems, agreed to delete $75 in late charges in exchange for payment of amount due. She even told her she could pay the amount due in two installments on the next paydays. This prevents the account from reporting another month late as well as prevents another late charge of $25.

She will then be current and can pay the monthly bill each month when due.

I was shocked at how nice the lady was to her on the phone- 15 min conversation trying to see how she could help her get back into good graces with Vict Secret. I guess they really want the money on the acct instead of sending to CA, so they are being human!