Will settling my credit card account hurt my credit report?

Question

Will settling my credit card account hurt my credit report?

Answer 1

That depends on what you mean by "settling."

If you mean paying the full balance of your credit card account, that will not hurt your credit rating...and like previously answered, use it once in a while to keep active reporting of timely payments on your report.

If you mean making an agreement to pay less than the full balance because you are delinquent, then yes, it will hurt your credit report. It will not hurt your credit rating as much as a charge-off will, but it won't be a paid as agreed account and will be reported.

Answer 2

If you settle your credit card account AND THEN CLOSE YOUR ACCOUNT it will definitely hurt your credit score.

The best thing to do is pay off your credit cards totally and then instead of closing your credit card account; keep it open and only charge $20 per month to keep it active. Then always pay the $20 each month as soon as you get the bill.

Answer 3

Are you settling on an open account or an account that is in collections?
Either way, you sound like you are behind in payments. Settling your account will not make your score go up. The only two things that raise your score are paying down your DTI ratio and making on time payments.

Answer 4

How delinquent are you? If you are current keep paying. If it is in collections. Take a settlement, saving no more than 799.00 or you will have to claim it on your taxes as income.