Settlement offers

Hi Casper - welcome to the forums! :-)

yes, paying through a settlement can adversely affect your credit vs. paying in full. I don't know how large of an effect it has on your credit, but I do know, from personal experience, that the creditor will report the debt as "paid in settlement for less than amount owed" on your credit report. That's exactly how it will show up - not paid in full.

If you have the means to pay the entire amount, your best bet is to do that and get it over with. Then follow up by checking your credit report at annualcreditreport.com - it's a totally free service where you can get your reports from all three bureaus once per year, or when you have been denied credit. There's no program to sign up for or fee to pay, and you can print your reports out, dispute inaccurate items online, and go back and check your report again.

Hope this helps! Keep us posted on your progress.
:-)

I dissagree with suebeehoney. The damage is pretty much as bad as its gonna get once the account has chaged off. Yes it looks a little better to show paid in full as opposed to paid per sttlement. However the sooner you hurry up and get rid of the delinquent debts owed the sooner you can re-establish your credit. Just hurry up and settle and get those debts knocked out. Once you get rid of the debt just have 12 month good payment history and your credit will vastly improve.

I guess I'm not sure where you disagree, Dave - you basically said the same thing I did - paid in full looks better than paid in settlement. And the OP didn't say his accounts had charged off yet - so paying in full would be his best bet, especially since he says he has the money to do so.

If he said his debts had already been charged off and were showing that on his credit report, I would definitely say take the settlement offers and run with them - like you said, the charge off of debts is already a bad mark, so at least having them paid in settlement would be better than that. But he never said they were charged off. Just that he had received settlement offers.

Not trying to start an argument here - just seems we were both saying pretty much the same thing, in so many words. :-)

what i am saying is that he should settle for less and pocket the mooney to put aside for a rainy day

Here is my two cents for what you take on this subject.According to the established formats of credit reporting,charge offs,paid charge offs,and settled accounts all carry the R-9 codes which is the worst code available. I would agree with Dave that settling helps get you out from under the load of the debt,but make sure you have it in writing that debt is settled in full so you have proof if the company should sell the balance. Now for my other view which is in agreement with Sue. On manual review of report,paid in full looks a lot better than settled to a potential lender.

With mine, they wanted the money so quickly, I really had no choice but to pay in settlement, because I could not come up with the entire balance in their time frame.
So settling out and paying the lesser amount kept me out of court. I felt that was my only option due to my financial situation.

thanks for the input, guys! Sometimes settlement IS the only option, and I've been there myself. But that's how I found out about how it's reported on the credit reports - and that creditor sent me a 1099 for the "forgiven" amount that I had to claim on my taxes that year. That's the part that really stinks.