Settlement on CC

[QueenJ]

Two of my credit cards offered a settlement option for me as I have not paid them in months.  I had called them a few months ago. and they told me they could not help me as my account was not past due.  NOw its about 3 months behind, and I am in one of their repayment programs.  Before they send it to collections they wanted to know if I want to settle.  I don't have that kind of money now, but I want to know how it would affect my credit/score?

[fused]

Moving your post to the FICO scoring forum.

[RobertEG]

A lot depends upon whether they do a charge-off before referring for collection.  That would add an additional major derog.

[AndySoCal]

The settlement could hurt your score more. The status of these accounts is delinquest correct ?  If you are to manage the repayment schedule I would not settle. Why if you are in a repayment program would they send it to collections?

[QueenJ]

think they are sending to collections as i've missed 3 payments.

[RobertEG]

Credit score impacts could be multiple, and substantial.

If they refer it to collection, they will most probaly also charge-off the debt. 

A CO and a CA, alone, are both major derogs.,  Combined, they are hell to deal with.

Their offer to settle before their next action is only yours to deal with.

What they can do if you did not pay is up to them.

Trying to negotiate a payment plan with the OC is the best way to try to forstall further CO or CA reporting.  But the decision rests soley with them.