I received a letter from Wells Fargo regarding a home furnishings store credit card account we have with them. Here's the background: Card was opened in late 2003. Have been late in the past, but never 30 days late. Account had credit line reduced a little over a year ago (to an amount above our balance) due to a review of updated credit history (had one medical collection post). Then a few months ago was informed that WFFNB was no longer going to be offering our account type. NEVER did anything say that the account was being closed due to our account history. Anyways, due to some financial stresses the last couple of months, I got dinged with one 30 day late on this account for our January payment. It's the first and only 30 day late on this account which we have had open for over 7 years now.
Yesterday I got a weird letter in the mail from WFFNB, that after reading twice, appears to be an invitation for me to call them and discuss settling the account for less than the full balance (it references maximizing the power of your 2010 tax return for financial gain or something weird like that).
I owe about $1200 on this account and would much rather pay that amount in full as time allows (with continued on-time payments) than take a settlement offer for less if it means my score would get hurt by a settlement. I assume that an account settled for less than the full balance would be a "baddie".
1 - call them up and ask for more information regarding the letter
2 - if they offer a settlement, say no thank you
They may want your tax return to pay off the debt.
Settled only hurts your score if it's reported to be closed as settled. If you can get them to agree that the account would be closed as paid in full for the settlement amount, then that would be to your benefit. However, forgiven debt is considered income, so depending on how much debt is forgiven, you could owe taxes on that amount.