Ordering Credit Reports Via Mail
2010
What are the different levels of settlement options (paid, paid as agreed, settled, etc)?
I’ve had some account in collections for a few years and I need to get them settled (one time payment). I’ve been receiving letters for a while and almost all of them are down to about 50% of what I owe. I’m obviously trying to get them down to 25-30% and I know I need all this in writing first. Because these have been in collections for so long I know I have a better chance at getting what I want (to an extent). My next step is getting my credit report updated, and that’s where my question comes in.
I know there are different ways that your credit report gets updated after a settlement such as “Paid as agreed”, “Paid”, “Paid charge off”, “Settled” etc. But how would you rank these on your credit report? What other wording is used? Also, I heard the best option is having the credit listing completely deleted, but do collectors really ever go that route?
Again, I know I need this all in writing and the money order must be sent via certified mail.
Thanks!
First, paying off derogatory accounts will not improve your score. The damage is done and will remain for the balance of the 7 year reporting period, whether paid in full, settled, or unpaid. However, creditors look at more than just your score. They review your whole credit report. Paid old debt always looks better than unpaid.
Different collectors will use different phrases to reflect the “paid” or “settled” status. Frankly, it all makes very little difference. A “paid in full” is only very slightly better than a “settled as agreed”. Most creditors reviewing your credit report will view them exactly the same way. Don’t get hung up on the wording.
General rule of thumb on settlement: if the debt is over 3 years old, offer 25%; 2 or 3 years old, offer 50%; less than 2, offer 75%. Lump sum gets the best deal. Payment plans must be short term — less than 6 months.
You don’t have to wait for them to make a lower offer. You can make a lower counter offer. The end of the month is a good time to get low settlement offers accepted, especially during the holiday season. Collectors have quotas and people are not paying off debts during the Christmas shopping season.
Get any settlement agreement in writing before you a pay cent. Keep that agreement along with your payment proof, forever. Do not give the collector direct access to your bank account.
Pay for delete agreements only work for single entry items like utility and medical bills. They don’t work for regularly reported items like credit cards and installment loans. The collection agency can only remove what they report. The original creditors charge off remains.
Prosecute Hillary Clinton for Attempted Credit Card Theft, etc!
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