Is there a difference in a Paid in Full Collection vs. a Settlement?

[Anonymous]

I have a bill that I have been paying on to a CA for over a year now. The OC reports the debt each month as the balance goes down as a "Paying as Agreed- Charge Off".  The actual CA has never reported the debt and said that they cannot because they didn't purchase the debt- they are only collecting on behalf of th CA.  Seems fair I suppose.

I have a balance of $1339.54 and the CA offered me a settlement of 50% of the balance and he said he could/would even extend it out for a full year if I need to as far as making monthly payments on 50% of the balance.  This CA to my surprise has always worked with me and I have never had any issues so he said (guy at CA) that he would give me time to think about whether I wanted to settle and it would show on my CR as a "Settled Balance" but that a "Paid In Full" would look better on my CR.  My question is that either way it shows it as a "Charged off account" so wouldn't it still be bad no matter what decision I make?

The CA said that my balance is low enough that I could continue like i have been doing and they wouldn't have any complaints (been paying $50 per month- no less than $25 if it is a rough month) and in the end it may look better on my credit report that I paid the full balance- but the settlement offer would get this out of my hair much sooner and the balance would still show $0- Paid in Settlement.

Which way affects my score the worse?   

[fused]

Rather a collection is paid or unpaid, both are equally bad in FICO scoring. Having a collection notated as settled will do nothing to help your scores too. If you can afford to PIF the balance, I would offer the CA a PFD. Having the collection deleted should help your scores depending on how old it is.

[Anonymous]

I guess I am bit confused bc the CA isn't reporting the debt- only the OC is reporting it... would I PFD the OC?  Is that what you mean?

[Anonymous]

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fused wrote:

Rather a collection is paid or unpaid, both are equally bad in FICO scoring. Having a collection notated as settled will do nothing to help your scores too. If you can afford to PIF the balance, I would offer the CA a PFD. Having the collection deleted should help your scores depending on how old it is.

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I am sorry but I am bit confused due to the fact that it is not currently being reported from the CA at all.  The debt is being reported from the OC as a charge-off/bad debt- Pays as Agreed status.  

Here is what myfico shows from the OC only...

Status as of Jul, 2008

Date Opened        -Nov, 2004

DOLA                    -May, 2008 (the last payment date on this particular CR)

Date Closed          -Apr, 2006

Largest Past Bal   - $9,688

Description            -Profit and Loss Writeoff

Balance- $1065         Current Status- Charged Off as Bad Debt     Past Due Amount- $0

30 Days Late- 0 times

60 Days Late- 0 times

90+ days late- 0 times

So my question is does it matter at this point if I settle the remaining amount (which the CA shows is a bit higher due to interest.)  The amount that the OC is reporting is the "Principal" balance on the car loan.

Like I mentioned before, the CA stated that I can continue paying like I have been- no less than $25 per month- or I can settle for half the balance and spread that out for up to 12 months if I chose.

Any suggestions for the best way to handle this?  It seems like the CA thinks I should pay it in full so it can look better since it is such a small amount remaining... he said if I owed a much larger balance he would suggest a settlement..   I guess my main question is if I pay it in full will it help my score much since it still will show a Charge Off status??

Help Please... I need to get an answer back to the CA as soon as possible.

[Anonymous]

"I guess my main question is if I pay it in full will it help my score much since it still will show a Charge Off status?"

It will ONLY help your score if they agree in  WRITING to DELETE the account-

Settling or PIF the CA will not have any positive affect in scoring unless it gets deleted.

[Anonymous]

thanks for clearing that up.