I am on a deadline to bring my credit score up, will settling accounts make it worst?

Question

I have 30-45 days and I have negotiated on some of my accounts already.

Answer 1

Very bad answers here! Only newport38 knows what they are talking about.

Let me explain how the "game" works.

When a negative item is first placed on your credit report, it is considered a recent activity. The formula used to calculate your credit scores gives those items more importance then older items, and they have a very bad effect.

As time goes by, the report gets older and it becomes less important. After around 5 years it only has a minor effect on your credit.

When you pay off an old debt, the creditor is NOT required to delete any of the negative information. He is only required to show that the debt is now "paid" or "settled"....therefore you think it's helping thing. But it isn't.

To make it even worse, when they report the new status, it now changes the status of this item to recent again, and your credit score will actually drop!

Therefore, what you need to do is negotiate a settlement with the creditor, and demand that they agree IN WRITING to DELETE the entry from your credit reports. Anything else is only going to hurt your score.

30-45 days is a very short time to improve your credit scores. Be sure you factor this into your negotiations, and demand that they report this immediately to the agencies.

Answer 2

No, a paid negative is better than an upaid one. However, it won't bring your score up right away, unless you can get the creditor to remove the negative. Some will but most won't.

Are all your other debts current? Do you have at least a 2 year consistent, on time payment history with your current debts? Have you paid off all credit card balances?

I don't know how much you're trying to raise your score, but you aren't going to see much increase in that short timeframe.

Answer 3

Absolutely. Settling your account will only prolong the time the account is reporting negatively. They will report it as settled but it will still be an adverse account.

The best way to "negotiate" if you want to pay off some of your debt to increase your score is to request a WRITTEN letter of deletion from each company. Otherwise, they will keep reporting it.

If you want some free advise, contact DiAnne Matheny at [phone] and tell her Rechelle referred you. She repairs people's credit for a living.

Good luck.

Answer 4

What kind of accounts? If you have collections on your credit report, you want to get those off of there as soon as possible. Collection accounts and judgments scream "I don't pay my bills", which looks bad to potential lenders and also brings down your credit score. Getting them off your credit history will only cause your score to go up!

Answer 5

No it should improve it if you have negotiated to have your payments reported onto your credit score. Also try not to pull your credit report too often as that lowers points, and see about using one credit card and paying it down exclusively every single month. That can raise your score a few points a month.

Answer 6

If you settle for less than what you actually owe, they will do a "charge off" for the difference. Charge offs hit you very hard on your credit score. Much harder than late payments, but not as harsh as bankruptcy.

Answer 7

no settling accounts will actually make things better.

Answer 8

Nothing wrong with paying your bills, if you have the money, pay your bills.