How does Settle for less on stuff you have on collections affect you credit score?
Answer:
A paid negative is just as bad as an unpaid negative.
If you are still within the collecting statute of limitations, send the collectors a debt validation letter first.
Then when they validate the debt, send them a pay for delete letter.
Request in that letter that after payment they will:
delete anything they have placed on your reports
not sell the debt or the remainder of the debt
not continue to collect on the debt or the remainder of the debt.
You should also request to pay a percentage of the debt.
Send all of your letters certified mail return receipt.
Do not try to deal with them by phone. They may twist the conversation around to suit them, plus any deal you make with them on the phone would be unprovable.
You might go to the site I've listed and do some reading on how to deal with collection agencys, credit bureaus etc. Start reading in the newbie forum and then in the credit forum.
'Settle for less' means you did not pay off 100% of your debt.
It means you are a higher risk to a lender.
Not good - you will pay higher interest rates to compensate the new lender for the chance you might 'settle for less' all over again.
If you missed payments, that is bad on your credit score.
If you didn't communicate with your creditors and make arrangements with them, and they had to send it to collections, that is bad on your credit store.
If you now offer to pay them less that what is owed.well, see the above. It's good that you are finally paying your creditors what you owe, but bad that you aren't taking responsibility for the full amount. Of course if you do nothing it will definitely ruin what ever is left of your credit.
Settle for less and paid charge off are negative comments on your report and do lower your score. But not as bad as open unresolved items. Basically the report shows notes that show what happened. Its still a red flag for lenders but not as bad (maybe a pink flag?). There is nothing you can do but pay on time and put as much distance as you can from when that happened with good history.
It really hurts your score. You need to pay it in full.
There is a section for each account to list the status, such as 'paid in full', there is one that says" settled for less than full" or something like that--- and that status DOES hurt your score.
it is bad because you are not paying for everything you used.
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