Trying to understand PIF vs Settle

[queenbutterfly]

Thanks in advance for the great work this board does. I have paid off all debts on my credit report.  I have 3 collections and 2 accounts that I have settle with. Trying to understand the impact of my scores with settlements. If I pay the 2 accounts in full will this help my scores? I read that settling or PIF collections are the same.

[Jazzzy]

I'll let someone else give you advice on the difference in impact of scoring...I honestly don't know.

You ask if you pay the 2 accounts in full, will it help your score. One possibility is a pay for delete (PFD). This is where you would pay the balance, but only if they agree to remove the account entirely from your reports. You may want to do some reading on the Rebuilding Your Credit forum concerning PFD. There are correct and incorrect ways to go about it. It's worth exploring the possibility.

Congratulations on tackling your credit reports. It's hard work....but so worth it.

[queenbutterfly]

Tried to PFD accounts with no success (still trying). Hoping paying in full will help my scores.

[AndySoCal]

Are the two accounts you are thinking abut settling with collection accounts ? If not what is current status of the accounts that you are thinking about settling?   The collection accounts have you tried talking to the original creditor to pay in full in exchange for them to pull your account from the collection agency. This ould be just as good as a PFD? A settled account is considered a serious derogatory on your credit report.  How much it would reduce your score by would depend on the status of the account and how long it has been in the status.

[queenbutterfly]

They are the OCs . I will try that method. Also the settlement was made in April 2009. I guess this will help my score...right?

[AndySoCal]

Settling accounts is considered derogatory it can hurt your score but never will help it. What was the status of the account(s) before you settled?

[queenbutterfly]

Both are closed. Legally paid in full for less than the full balance

[AndySoCal]

Its the less than full balance part of the message that makes it derogatory. Below is a link to article on settled accounts.

http://www.bankrate.com/finance/credit-cards/how-is-debt-settlement-reported.aspx

Message Edited by AndySoCal on 12-18-2009 07:18 PM

[queenbutterfly]

Should I see a small scoring increase even with lates on both accounts if i pay in full. ($2000 total)

[AndySoCal]

What was the status of the accounts before you settled them?  Ie Current Delinquent collection or charge off.