cancel
Showing results for 
Search instead for 
Did you mean: 

Navy Federal Settlement will not update balance to 0

tag
Anonymous
Not applicable

Navy Federal Settlement will not update balance to 0

We have come to terms on an agreement to settle a debt. But Navy Federal will not update balance to 0, rather the remaining balance only with notation settled for less than full amount.

Is this standard practice? Should they be updating balance to 0? What should I do?

I have not made the payment yet until I get a clear answer on this. Please advise.
Message 1 of 7
6 REPLIES 6
Medic981
Valued Contributor

Re: Navy Federal Settlement will not update balance to 0


@Anonymous wrote:
We have come to terms on an agreement to settle a debt. But Navy Federal will not update balance to 0, rather the remaining balance only with notation settled for less than full amount.

Is this standard practice? Should they be updating balance to 0? What should I do?

I have not made the payment yet until I get a clear answer on this. Please advise.

I am confused. You have not made the payment yet and you want NFCU to update your account balance as zero?


Yes as I understand it, this is standard practice. You settled the account for less than owed and NFCU is noted that on the account. Unless you negotiated to have the account marked as "paid as agreed" this is what I would expect from a creditor.

 

Unfortunately, you did not pay NFCU back the debt that you incurred under the original terms and NFCU has noted this on your credit report. This will continue to report as a derogatory entry until seven years from the date of the first delinquency. 

 

Once you have settled the debt, you can start on a goodwill letter-writing campaign to request the derogatory account be removed from your credit reports. I am not sure of the success with goodwill letter-writing campaigns for NFCU. Perhaps another myFICOer can advise you on this.







Your FICO credit scores are not just numbers, it’s a skill.
Message 2 of 7
satio
Frequent Contributor

Re: Navy Federal Settlement will not update balance to 0


@Anonymous wrote:
We have come to terms on an agreement to settle a debt. But Navy Federal will not update balance to 0, rather the remaining balance only with notation settled for less than full amount.

Is this standard practice? Should they be updating balance to 0? What should I do?

I have not made the payment yet until I get a clear answer on this. Please advise.

When you settle a debt for less, the balance will be set to 0 and the account is usually marked, Paid in Full, Settled for Less than the Full Amount.

 

The person giving you information that the account will not be set to a 0 balance as far as the CRAs are concerned is not giving you correct information.

 

By law, if the creditor agrees that the debt is settled in full for the payment amount it MUST be updated reported as such to each CRA and to 0 balance.

 

You should simply ensure that you will receive documented letter to the effect that the debt is settled in full in return for the payment amount agreed. It's NFCU, so I am sure this will be the case, re: that you will receive a documented letter.

 

Usually it occurs over two monthly reporting cycles, first the paymout amount will be deducted and there will be a remaining balance still showing and then next reporting cycle it will update to 0 balance.

 

I have never dealt with NFCU on such a matter but have with others during my own rebuild.... couple of CO accounts with Cap1.


Others around here are more versed in such matters but again, the rep you are talking to is not giving you correct information as to how the account will be reported to CRAs.

 

Internally, NFCU may very well keep record that the balance was not paid in full and that will likely prevent you from doing further business with them as a result. This is probably what the CSR is actually conveying without being clear in their own mind in regards to what gets reported to CRAs.

 



Message 3 of 7
Anonymous
Not applicable

Re: Navy Federal Settlement will not update balance to 0

Thank you for the responses thus far. Just to clear up the confusion, we have a verbal agreement to settle the account for less. We are just going back and forth on how it would be reported on my CR.

At this point, I am just waiting for the written agreement of our terms before I make the payment.
Message 4 of 7
OmarGB9
Community Leader
Super Contributor

Re: Navy Federal Settlement will not update balance to 0


@Medic981 wrote:

@Anonymous wrote:
We have come to terms on an agreement to settle a debt. But Navy Federal will not update balance to 0, rather the remaining balance only with notation settled for less than full amount.

Is this standard practice? Should they be updating balance to 0? What should I do?

I have not made the payment yet until I get a clear answer on this. Please advise.

I am confused. You have not made the payment yet and you want NFCU to update your account balance as zero?


Yes as I understand it, this is standard practice. You settled the account for less than owed and NFCU is noted that on the account. Unless you negotiated to have the account marked as "paid as agreed" this is what I would expect from a creditor.

 

Unfortunately, you did not pay NFCU back the debt that you incurred under the original terms and NFCU has noted this on your credit report. This will continue to report as a derogatory entry until seven years from the date of the first delinquency. 

 

Once you have settled the debt, you can start on a goodwill letter-writing campaign to request the derogatory account be removed from your credit reports. I am not sure of the success with goodwill letter-writing campaigns for NFCU. Perhaps another myFICOer can advise you on this.


OP is asking about the balance issue, whether NFCU will report the full balance minus the settlement, or zero balance. Not the settled for less notation. 

 

OP, the CSR is wrong, they MUST update to zero regardless of whether you settle for less or PIF.


Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 5 of 7
Anonymous
Not applicable

Re: Navy Federal Settlement will not update balance to 0

Just wanted to provide everyone an update. Navy Federal updated my balance to 0 after settlement. Even though I was told repeatedly on the phone that they won't. 

 

1 down, plenty more to go. Thank you everyone. 

Message 6 of 7
OmarGB9
Community Leader
Super Contributor

Re: Navy Federal Settlement will not update balance to 0

Thanks for the update. Glad it all worked out. 


Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 7 of 7
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.