NFCU Settlement Offer

[MontegoMack]

I'm in the doldrums with my credit and now have cash on hand to pay down some debt and improve it all. Navy Federal Credit Union (NFCU) gave me a generous settlement offer:

As of the date of this message, the payoff amount is $14,006.62. In an effort to assist you, we are willing to accept a lump sum settlement of $4,902.31. 

If I accept this offer, how does it show up on my credit report? Paid in full? Settled for less (if that's a thing)? WHat are the pros and cons of settling this up with them?

Currently, I have my mortage with them, but the closed my platinum credit card and my savings is open, but not accessible (anything deposited goes to the aforementioned debt). 

[CreditCuriosity]

paid - Settled than less on credit report would show and never be able to have another credit from them again unless made whole being whole debt.  Very generous offer and better than being sued if NFCU does those actions if one benefit with settling this debt that alone should make it a good thing I would think unless a bk is in your future.

[MontegoMack]

BK is NOT in my future, so maybe just paying it down is the better option. That way, I won't lose the possibility of getting a card with them again. Maybe ask for a PFD? 

@CreditCuriosity Thoughts?

[CreditCuriosity]

if can afford full payoff of debt for a PFD then certainly doesn't hurt to ask them but not sure if they are known to do this as don't follow rebuilding section very often just happen to see your post on front page.  Others will know better if NFCU offers this option if bk if not an option and one place I wouldn't want to burn at all it would be NFCU as you know very good limits on cc's and rates for car loans etc.

[Horseshoez]

@MontegoMack, with the proviso of "I've tracked lots of NFCU stories, however, I have zero first-hand experience getting back in with them as I've never burned them", my understanding is:

• The only way to E-V-E-R be approved for more credit from NFCU is to pay back everything you owe; no exceptions.
• If you settle for less than what you owe it will help your credit rating, and this in turn will help you get approved for credit from other financial institutions not named NFCU.
• NFCU doesn't do PFD, ever.

[GreatLife]

Everything everyone else said..with the added consideration that NFCU holds your mortgage. Some future day you might want to use them for refinance or equity lending purposes. They might even sell or off load servicing of your mortgage to a bottom feeder. I say pay in full if your finances permit and begin re-establishing a healthy financial relationship with NFCU. Chase cards in your other post isn't an equal situation IMO.