Is it true that if you a accept a settlement from a debt collector your credit score will decrease? I really need to know before I accept a settlement for $800 less than the amount I actually owe.
2007-01-25 08:20:38 · 8 answers · asked by Cuteness 4 in Business & Finance ➔ Credit
If it is a debt collector, they have bought your delinquent account for pennies on the dollar. Your credit is already damaged, the best you can do is show that the debt was settled for an amount less than the full amount owed. This is better than showing still uncollected.
If a collector has offered a settlement, get the deal IN WRITING BEFORE you send them a cashiers check or money order. Make sure it says "as settlement in full". DO NOT give them your checking account information or access to take it out of your account. They can and will clean you out. Keep copies of everything FOREVER because this can and will come back later somehow.
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The answerer above me has a good suggestion to try and settle it with the original creditor, then show the collection agency it has been taken care of. STILL keep copies of everything forever.
2007-01-25 08:34:44 · answer #1 · answered by djollie111 3 · 2⤊ 0⤋
DO NOT do it. I did this with a collection agency about 8 years ago...and paid about $200 less than the debt I really owed. They told me all would be settled. But it has showed up on my credit report (until last year when I reached the 7-yr mark) as "charged off", which was considered a negative on my report. IT DID DROP MY CREDIT SCORE!!! I highly recommend you call the original company you owe and work out a payment plan and pay the full amount to them. I couldnt buy a car without a co-signer all thanks to that one bad debt!!!
2007-01-25 08:32:47 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Prior to paying the settlement, get a letter from the company that they will report the debt as paid in full on our credit report. You don't say how old the debt is, but that will also determine how easy it would be to get the letter.
2007-01-25 08:31:52 · answer #3 · answered by chip t 2 · 1⤊ 0⤋
Your score will be lower than if you paid the obligation promptly but higher than the chared off account that would show if you don't settle. If a collecting agency will settle for $800 than you do owe, it's probably a wise decision to settle the debt.
2007-01-25 08:29:41 · answer #4 · answered by bnkr27 2 · 1⤊ 0⤋
Dont do it! They get a commission and the place you owe gets just about nothing. The honorable thing to do is pay back the people you owe on your own.
Your debt is listed already in your credit profile as late, not paid, you have already done the damage this wont help.
From now on pay your bills and ON TIME!!!
2007-01-25 08:26:31 · answer #5 · answered by god knows and sees else Yahoo 6 · 1⤊ 1⤋
It will state on your credit report that you paid less than the full amount. If they want it bad enough you can make it part of the deal that they change the delinquent status to "satisfied". Good luck with that. But get it in writing before you pay.
2007-01-25 08:28:12 · answer #6 · answered by Lisa P 4 · 1⤊ 1⤋
Yes that is true, but if you do not pay the debt, your credit score will go down even more.
2007-01-25 08:29:01 · answer #7 · answered by sprcpt 6 · 1⤊ 0⤋
Do you have a written agreement of the settlement? Do you have cancelled checks or other proof of payment? You will need that documentation to prove the account was settled.
2016-03-29 02:26:19 · answer #8 · answered by Anonymous · 0⤊ 0⤋