Santander Settlement Offer

[refereeguy1390]

Hello all!

I've been rebuilding my credit with a couple of hiccups along the way since early 2021.  Overall I've made progress to where all of my collections are paid and removed and my FICO 8 scores have gone from the low 500s to the mid-upper 600s.  

About a year ago my car was repo'd and the account charged off by Santander.  I still owe about $3300 after auction and fees.  I received a settlement offer of about $1300.  My income stream has been improving and should continue to do so over the next few months to where I was going to begin paying monthly about $350 (my old car payment) by May.  The extra $2000 over the next year would be helpful to save towards a car down payment.

My FICO 8 Scores are EX/EQ/TU 685/640/660 but my EX Auto 2/8 scores are 595/650 which are being impacted by the amount owed on charged off account.

I'm aware that a settled for less than was owed is a negative mark on my credit report so my question is this.  How much of a negative is the settlement going forward?  Would it stop me from getting another car loan in the next year or so?  I'm aware it might be more in the sub-prime loan range.  Or would paying in full perhaps in four to six months be worth it?

I'll hang up an listen!

[FireMedic1]

It will reflect a $0 balance. You paid your debts. Nothing will change the CO status or comment paid for less than amount owed. That will fall in 7rs from the DoFD. I had them once. They're a mess.

[OmarGB9]

The most damage has already been done by the CO/Repo. At this point, settling or paying in full will yield the same results: a $0 balance as mentioned above. How much this affects you varies by lender when it comes time to apply for the new car loan.