settelment or delinquecy..which is worse for the credit ?

Question

whats the diffrence if i settle a credite cards balance thru a legal settlement,or just ignoring it,and ignoring ther collection agency?
what is worse for the credit,and whats the diffrence?
thanks! for the help

Answer 1

Hello,

The answer to your question will depend on a number of conditions. I am a financial counselor with years of experience with debt settlement. I would never answer a question like yours with a simple yes or now.

The key question I would ask you is "How old is the debt?"

If the debt is beyond your state's statute of limitations, then it is essentially uncollectable as the creditors can no longer sue. If it is close to 7 years old, it will be coming off your credit report soon unless there is a judgment. When a debt is very old, the impact on the score is minimal.

In general, your score will be better if the debt is paid than unpaid. Settlement can result in several different notations on your file, will it be marked as "Paid" or "Paid Settlement" or some variation. More important is that Settlement also reages your account, starting that 7 years over again. Every month that goes by after settlement while make the late payments get older and older, the score will increase each month.

If your debt is only a couple of years old, you should probably settle it. If you have a lump sum available, you can do this yourself but you need to be careful with your documentation and negotiations. There are thousands of settlement companies. Here is the criteria I recommend:
1) Make sure they have been in business longer than 5 years.
2) Make sure they are a law firm, not that they have a lawyer on staff.
3) Check out the attorney's credentials with the American Bar Assoc. and his/her state Bar Assoc.

Do you belong in a settlement program and do you qualify for my settlement program? You can contact me by phone: [phone] and ask for Cherry during PST business hours.

Answer 2

Delinquency is always worse. You should never ignore collection calls from your creditor. As painful as it may seem you are always better off financially and credit wise to try and work out any payment plan possible. The attached link has some excellent resources and information on dealing with creditors and credit card companies. I hope this information is helpful.

Answer 3

Obviously the folks who responded to this haven't read any of my previous answers.....so let me say it again.

If you pay off a delinquent debt, it will still show up on your credit report as a negative item. While it will now show "paid" it will still show that there were late payments, collections and charge off's.

If your intent is to fix your credit report, you MUST get the creditor to DELETE the negative information completely from you records. If they refuse to do it, then don't pay.

True, it does look better to have a paid delinquency on your report, but it's such a minor effect it's not worth discussing it!

Answer 4

Bad credit is one of the worst problems to have... however there exists a solution.

I will hereby talk from my personal experience.

I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is astraight to the point ebook with question and answer I found :

http://umgarticles.atspace.com/debt-consolidation.htm

if it helps kindly remember me in your voting!.. cheers!

Answer 5

Ignoring it is always worse. Settlement, is bad for a time, then you recover. A settlement can hold you back for 2-3 years, Ignoring it will hold you back until you pay. If you don't pay in full, ignoring it will hold you back from the time you start to pay until you finish paying. The sooner you start the settlement, the sooner your credit will get repaired.

Answer 6

I Get credit every day by having 2 Beautiful Daughters and a Wonderful Sweet--Caring GRAND-child.

Answer 7

i just ignored mine. its best to do that after so many years. but its still on your record. hell i have bad credit but still managed to buy a brand new car. sure with higher interest rate. but..i still did it and its not really for much more than someone with good credit would pay either. but at least after i get this car paid off my credit will improve a lot. if you've had problems for a few years. best to just ignore it

Answer 8

Delinquency is worst, but settlement says to the prospect creditor that you will pay a bill

Answer 9

Your delinquent. Its on your credit.
What you need to keep in mind is that if you settle, you will have to pay on the difference as "income", and it will state that it was settled and not paid as agreed.