I have been slowly working at putting a plan together and getting my finances in order and I'm at a point now that I can take care of my first major debt. I returIned my vehicle back to the loan holder back in early 2014, after they auctioned it off, they charged off $3,600. Since the charge off I made a small payment to the company they hired to collect on the debt of $50 which was in February of 15. The loan reported a payment in March of 15. All that aside, the original loan company still owns the debt as they are the only one reporting to two bureaus, EX and EQ. I have saved up some money and would like to settle the account over a 3 month period. I have no problem waiting 3 months and just paying in full in one shot, but I fear they may decide to pursue a judgment which I'm looking to avoid.
How would I best pursue settling this account to have the greatest effect on my credit scores? The payment history is unfavorable and hurts me there. Would it be possible to ask for a settlement as such: I pay the account in full in 3 payments, Sept 15th, Oct 15th, and Nov 15th; upon completion of full payment, they remove all negative history on the account. Any likelihood of this being possible?
Any other suggestions on how to handle this would be greatly appreciated!
They can, until the entire delinquent debt is repaid, continue to update the charge-off by monthly reporting.
That informs others that the delinquency persists, and is considered by FICO as affecting scoring by increased delinquency period.
Satisfaction of the debt in one payment would terminate updates, and let the CO begin to age in its scoring impact.
You can also, after having discharged the debt, begin a GW campaign requesting deletion of the CO, which is basically a statement in your file that you are not expected to pay the debt. Having actually paid provides basis for asserting that deletion of the CO would more accurately reflect upon you as a consumer who does pay their debt.