Settled for Less VS Paid in Full on Your Credit Report
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- Опубліковано 7 лют 2025
- It may seem like "paid in full" is a more desirable outcome on your credit report, but the reality is, settled for less is just as beneficial when dealing with unpaid collections.
If you have collections, and care about improving your credit score, you will want to know how to best reach your goals.
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Michael Bovee started CRN in 2004 with a mission to provide people in need with detailed credit and debt help. The DebtBytes Channel is an extension of the CRN blog, and is dedicated to finding the debt relief option or strategy that works best for you.
Omg I love your straight forward approach so refreshing...thank you!
Hi Michael. I am making this comment to let all your viewers know that you are the REAL DEAL. I had a horrible year, which made it impossible for me to pay my credit cards. I followed your instructions and just found out that my $11,000 credit card debt is being settled for $2700! So glad I did not follow advice from others who would want a big cut to do something I did myself. I cannot say enough about you! Integrity, knowledge, decency. Love you!
May I ask how you did this--- there is so much information out there, how did you make this happen?
I want to know more too
Thank you I got offered the settlement and I was thinking on paying in full instead of taking the settlement but know I the cons of using the settlement thanks to this video.
Paid my platlium card in FULL this morning!! Im good for next month now i feel better paying my credit union back!! 💗😇💗
I just settle an account vs paying it in full because of your advice! Thanks
Thanks for this! This is the exact thing I was looking to get answered.
The only downfall to settling for less is potentially getting a 1099-c at the end of the year from the creditor. For example, if you owe 10k in credit cards and you settle for 2k, you may get a 1099-c for 8k. So when you file taxes, if you are filing on let's say 50k, now you are filing on 58k.
Thank you for this insightful video. Now I feel better that I settled less a few weeks ago before I found this video
Thank you for that information!! I just wish I saw this video before because I just made an offer 1000 less than what I owed. I was told to offer lower but didn't because I asked for the pay for delete which I didn't get. I was told to discuss it with credit card customer service :/ after I made the payment. But, I did owe that money, I'm just glad it's over with now.
I really liked your straight forwardness. Simple to the point. I just settled one of my credit card about 80 %off....and listening to you I feel so good.....unlike a couple of the videos I have watched about debt settlement
Man thank you just to get to the point. I was over here going crazy thinking what to do.
I negotiated a 29% discount by paying one of my debts early. I felt anxious about the 'partially settled aspect on my report, however reassured after this video. Also knowing that it only stays on the record for 6 years in the UK.
In addition to the settling of debt, it’s important to take into account that for any forgiven amount over $600, the creditor may be required to report this amount to the IRS where they may provide a 1099-C. This difference is considered taxable income. I understand there may be exceptions as to the type of debt.
cubanlinx4sure can you explain this a little more
I’m trying to purchase a home soon so I’m paying off my collections !
Michael, thank you for the quick response and good information. It's been super helpful in cleaning my credit!
Glad it was helpful!
Thank you for explaining that and freeing me of paralysis of analysis
hey micheal thank u are the best so straight forward, in community while been straight forward is close to impossible
Thanks got to the point and cleared everything up easy why are not you tube videos like this get to the point! Awesome video.
Short and sweet. thank you!
Great channel. I am at the 60 day mark. I retained a BK law firm to settle my debt for flat fee instead of filing BK 13. My FHA loan came through and was able to get cash out $30K sitting in the bank . I owe Chase, Citi , and Discover around $63K. I had small $2500 balance with Amex and made sure to pay them off to avoid a suit. My attorney said I have to wait till we are at least 5 months behind. I am counting down the months and celebrating as each month goes by which sounds counter intuitive. I can't wait to get my life started over again once these accounts are settled. If I filed BK 13 , I would pay close to 100% because I have assets.
Thank You this really helped my girlfriend and I
More great advice. This channel has helped me navigate through the process and come out with the best possible outcome for my situation.
Very helpful information!
Thank you... love the straight forward approach
I HOPE YOU ARE RIGHT I WILL LET YOU KNOW WHAT THE RESULTS WHERE.
You’re awesome! Thank you for the advice!
Thank you!
Great info, thanks.
Thx for the straight forward answer
Straight to the point. Thank you
Excellent advice and explanation!
Thanks again!
great advice
Very helpful information 👌
Great video, very professional and educated advise.
This is exactly why I am closing any accounts that I do not have any balances on them ., doesn’t make a difference my score is in the high 500s and one account reached out to me to tell me that they lowered my credit limit from 6,000 to 1,000 .., that was what gave me the thought that having accounts open doesn’t help much to at all ...
I would try to keep any open that I do not owe on, or that have low balances, if my goal was to settle with other accounts I feel late on. The open accounts that existed prior will typically help my credit bounce back quicker than have to open new ones that do not have that same age.
Very informative, thank you.
Great INFO!! Thank you.
Thank you so much.
Hey I love your videos man
Great answer thank you
Whoa, you just saved me a lot of money!
Thank you sir!
You bet!
I appreciate what you do sir
My pleasure
Watching this from the UK and have just got a pre approved discount for a debt from 2016 with a 70% from £281 to £84.00 i was going to reject it and pay the full amount but I'll take the discount now after watching this many thanks for the advise :-)
Very helpful!
Thank you
I also have some questions too as in which order I should pay off my remaining 5 balances off
Yodam Bomb the snowball strategy, smaller debt first
If a credit card company has already charged off the debt does that mean it already took the loss on its profit and loss statements? Do they then sell the debt to a collection agency after already benefiting from logging it as a loss?
Your bank charging off your unpaid credit card is indeed an accounting function. They can no longer treat your account as an asset but as a loss.
They can log it as a loss and collect from you later. Happens all the time. They would later account for what they were able to recover from you.
If they sell it to a debt buyer, those funds they receive from the purchaser should be accounted for in the same way.
@@MichaelBovee @MichaelBovee thanks for the answer. So let's say you ran up a $3,000 credit card and never paid it. Eventually the credit card company entered it as a loss. I'm assuming they are allowed to register that loss against any profits they earned as a company? Now suppose they sell that $3,000 debt to a collection agency? Is that how it works? Somebody pays them a certain amount of money for that debt and then tries to collect it? Let's say the credit card company sold it to the debt collector for $500. I'm not sure if this is how it works I'm just being hypothetical. Now let's say the debt collector says they can settle your debt for $1,000. This way they make back the $500 they paid for the debt and they profited $500. My question would be does the original credit card company report that $500 they made selling your debt as profit and then registering the 2500 dollars they lost as a loss? I'm just trying to understand who gets what and how it's reported.
does this apply to canada?
I would talk this over with someone who has debt settlement and credit reporting experience in Canada.
I have settled debts in Canada, and the process is much the same.
I have not studied and reviewed credit reports and scores with Canadians before and after debt relief like here in the US.
As you predicted, amex filed suit against me 3 months almost to the day of deliquency. They hired a law firm and have already paid court costs. I still havnt been served, expecting to be any day now. My question is- Do they serve you with a court date right away? Or do you have 20 days to respond and then are sent a court date in the mail? Trying to maximize the time I have before I start paying. Really appreciate everything you do, your videos have been a great help to me.
Depends what state you are in. Arizona is 20 days from the serve date.
I want to say I had 30 days to respond in GA.
It is state specific. Some courts have a system of setting appearance dates as a method to control a busy calendar. California, for example, may set a trial date out more than 12 months at filing. They are just that overwhelmed.
You have options to resolve the situation long before that.
I was explained that if I settled that they would report the unsettled balance to the IRS. Do you have a video that explains what the IRS does after you settle a credit debt?
I have an article about tax on canceled debt here: consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/
If you come to an agreement on paying the debt for a smaller amount on the phone, can you trust that they will honor the agreement ? Thanks for all you information it has been very helpful.
I want a letter for all settlements. If they will not provide one without the payment set up in the system first, that can happen. I would record the phone in that case, and I would tell them I am recording and why.
Michael Bovee thank you for all your help and I truly appreciate your advice.
Hi Michael. Great video and very informative. I have a credit card from Bank of America that was charged off about 6 years ago. I actually had forgotten that I owed It. Recently it started reporting itself again on my credit report as late payments and is hurting my debt recovery efforts. Would settling this debt be a good option for me?
How close are you to it falling off?
What is the balance?
What financing goals do you have between now and the account aging off?
I sued a dealership on a auto fraud case and won....it finalized in March 2021..I returned the car and I got most of my money back (monthly payments,out of pocket,and rental fees)..but my credit score went down 150 points..they labeled it paid in full but for a lesser amount... Can I get that fixed , and how long does it stay on my credit report
I saw your other post before this one with more details.
Negatives stay for 7 years. This will lose its potency over the course of a couple years.
I may even try to dispute this off.
@@MichaelBovee I think it was lawyer who told me that this would go away in 8 months...I think I might dispute it since my score took a big hit ...thanks for the quick response
@@MichaelBovee How do I dispute it?
Here is a primer on credit report disputes: consumerrecoverynetwork.com/dispute-tradeline-diy-credit-repair/
How do you know what stage of debt collection you are with your bank?
Much of it can be parsed by how late you are with payments. How late are you? Who is the creditor?
Great info, I’ve watched several. I have old debt from years ago during a divorce. I’m talking 3 accounts totaling like $1500. My credit score since then has bounced back and I’m looking to buy a new house, but want to clean up everything before doing so. But I’ve seen where paying off old debt hurts your score, not helps. Is that true?
How old are the accounts (when you stopped paying them)? Are they still appearing on your credit reports?
Michael Bovee Between 3-4 years old. Yes, they are still on my report.
Your mortgage lender may refuse your loan if you have unresolved collection accounts, and no matter the credit score. If it were me I would settle them and get them updated first. But if you have a lender already in mind you may want to ask them.
Hello. Is "Charged off" different from "Settled account". Thanks.
Those are very different things, and you can have both showing for the same credit report tradeline.
A paid charge off is better for improving your credit and reaching your goals, than an unpaid charge off.
One question: If it is settled for less and it goes to manual, wouldn’t that be a negative for the credit analyst to see? Like, hmm, this person didn’t pay their full balance.. just part of it. Denied. ??
Most credit decisions are not manual, and the ones that are, like a mortgage, will still lend to you with paid collections.
At the end of the day, a paid collection looks better than an unpaid one.
Hey Mike thanks for your shares. This video is pretty much what I thought when it comes to paid in full vs settled. I do have one question I have read that if you do pay the debt in full it will fall off your credit after 7 years like it normally would but if you settle it will drop off 7 years after the settle date. Any thoughts on this?
The debt you settle does not start over for 7 years. That has never been okay. If it happens you dispute it off, complain to regulators, or even get an experienced FCRA consumer law attorney to sue the furnisher.
Settling a debt, or even making an odd ball one off payment, does not breath new life into the 7 year limit for negatives to age off our credit reports. The date stays the same.
Even if a debt buyer is reporting in addition to the original creditor's charge off, all entries should come off when the original one ages off. See more about accounts aging off credit reports here: consumerrecoverynetwork.com/question/collection-accounts-age-off-credit-reports/
The only legitimate exception to this was when sued, and a judgment entered in the public record, that had its own clock (which was still double jeopardy and a crappy thing to do to people), but most state court judgments came off of the 3 major bureaus credit reports in July 2017.
@@MichaelBovee Thanks Michael I enjoy your videos and have learned a lot. Two quick questions from watching your videos. 1 is getting the settlement letter by email okay or does it have to be regular mail. 2 I watched a video where you mention sometimes CAP1 on a settlement will show settled but still list the difference of the settlement still owed instead of zero, but its been awhile since that video. I am deal with Radius the debt is a charge off still under Cap1 on my report but they are contracting Radius to try an collect. I called CAP1 and it transferred me to them. $706 debt.
Email is fine when they send the letter attached as a PDF. Some now have web portals you can download the settlement letter from. That should happen more and more going forward. You do still want to cross reference the content of the settlement letter with the bullet items I list here: consumerrecoverynetwork.com/debt-settlement-letters-agreements/
Capital One has turned the corner on most of the weird stuff they used to pull. It can take 2 billing cycles for the credit reports to reflect your settlement though (that goes for many banks, not just Capital One).
I don’t understand what “charged off” means.
Check out this post for more about charge off: consumerrecoverynetwork.com/charge-off-and-credit-card-debt-what-it-means-to-you/
So they do have to update it to 0 though AND add a comment that says it was settled for less or something? I have a couple I settled and the balance just decreased by what I paid versus going to 0. And they have not updated the remarks either. Is that normal for the first reporting round or something and they correct this next months round of reporting to the credit bureaus?
It is pretty normal to need two months after completing settlement payments to show the zero balance and paid collection status. Post an update if that has not happened for you after roughly 70 days from when your last settlement payment cleared your bank account.
If you settled an active debt collection court case it can sometimes take a little longer than that.
Can you get the items that are “settled” erased off of your credit report?
Some people try to dispute them off prior to the 7 year clock ending (starting from when you stopped paying, not from when you settled).
Banks and lenders are not all that accommodating, but some debt collectors can be.
So In other words Michael Bovee, to be approved for a mortgage rather sooner than later, would you recommend paying things in full?
Thanks for the quick response!!
Paid collections will allow you to get the home loan. It does not matter if you pay in full or settle for less. You get to the same place.
If it were me, I would settle for less.
So when will the settled charge offs fall off?
Up to 7.5 years from when you stopped paying the original creditor.
I'm new watcher. what is the time to expexct first credit card after bankrupt
Many people get preapproved offers in the mail within weeks of filing chapter 7. At a minimum you could look to establish a secured card quickly.
will settled vs paid in full affect the actual credit score number in the score increase?
That is going to vary from one person to the next. Resolved debt is going to have a positive impact over an unresolved one, even if not immediately from a score perspective.
If the account is already charged off, resolving it in full, or for less, is not much of, if any difference.
We can resolve one debt out of, say 4, and see no improvement at all, because there are other things holding improvement up.
Have a Wells Fargo bank credit card 6 years old went into collections they sent a letter to settle for 859 instead of 3000 is this best to settle for leave to fall off
What state are you in?
Do you have a major credit or financing goal in the next year, such as buying a home?
Michael Bovee Florida and yes wanting to buy a house within a year
Michael Bovee I have a car loan last payment tomorrow issue is I have 13 late payments on it which I’m only the co-sign
You will have to settle this and get it to show as a paid collection on your credit reports if you are going to be trying to get a mortgage prior to the 7 years limit for Wells Fargo to age off your credit.
The late pays on a paid off auto loan are not ideal, but you can still get a home loan approved with those.
The Collection agency hasn't reported my debt to the credit Beaures yet, should I settle with them or pay in full?
Who is the collection agency?
Who is the original creditor?
@@MichaelBovee The Original creditor is the Check Cashing store named CheckNgo
and they gave it to a company named Halsted Financial Services LLC
Settling or paying in full will have the same affect to your credit at this point in the collection - if it is on there - which it is not.
Settling or paying in full, either way, may not prevent this from going on your credit, but if you have the resources to resolve it now, I would, as there is at least a chance it does not go on your credit.
@@MichaelBovee ok so should i speak to the company and ask them if i settle or pay in full will you guys promise to not report it to the credit bureaus ?
It is worth a shot!
have you ever heard of CMRE medical collector? And do you have any videos or other advice on dealing with them?
Yes, but I do not have a dedicated video on them. Here is one about medical debt generally: ua-cam.com/video/DKEVRqmpp7s/v-deo.html
Can you please let me know if I'm understanding correctly?
I have a derogatory mark for direct TV for $249, the collection agency is offering a settlement of $171. If I'm understanding correctly, there likely won't be a difference in score if I pay in full vs settle? Thanks for the clarification in advance.
Accounts that go without payment several months or more typically do not benefit from full payment more than settled in full, but for less money.
Hi. I hope you and your loved ones are well. Thank you for posting these awesome videos. Can you share a quick feedback about this please: I settled for less than full in February of 2019 on four very old credit accounts. Is there a way I can fight that and have it removed from my credit report by now?
There is a 7 year shelf life to negatives on our credit reports. That time starts from when you stopped paying.
Do you recall the month and year you stopped making the payments?
Portfolio recovery is doing pay for deletion now. I had 2 small accounts in collections and settled them both a few weeks ago. One was portfolio recovery. The other one I was actually being sued by a debt collector and ended up settling for less to just get it out of the way and avoid trial.. My credit report was just updated and now says I owe $117 on said account ( total was $585 but we settled for $468) which is weird but I have paperwork to show we settled and it's considered paid in full, as well as paperwork from court (it does say "dismissed withOut predudice"🤔) so I guess I'll wait another month to see if they update the balance to zero. I hope they aren't trying to say I still owe the remainder we settled for what a headache
Who is reporting the remaining owed if not PRA?
@@MichaelBovee this was a seperate account. LVNV is who sued me and has been reporting monthly so I'm assuming it was them that updated it just not understanding why it doesn't say 0
It can sometimes take 30 to 60 days for banks and collectors to get the reporting right. I would wait a month and then dispute it with the credit bureaus if it were me.
Avocado& Megs hello, did LVNV accept pay for delete? I am trying to settle with them for 40% but the lowest they will go is 50% but I am also trying them to do pay for delete
@@josenegrete3694 LVNV now has a credit reporting policy where they delete resolved accounts. It does not matter if you pay in full, or settle for less. They publish their policy on an FAQ page here: portal.resurgent.com/faq
You should not have to negotiate a pay for delete anymore. It will just happen.
You, of course, will want to check your credit a month or so after your payment clears.
Thank you for this. Im looking to settle old debt and clean up my credit report. I’m looking for info on how to write a letter to discharge the older paid credit off my credit report (if this is even possible)? I would like to apply for a FHA loan to buy a home or go through my bank. Got to get my credit score up (high 500s).
Who are the creditors and companies still showing unpaid collections on your credit reports?
When did you stop paying on those accounts?
Just got a settlement letter for me to pay 1500.00 on a 22,000 dollar debt in student loans from over 10 years ago looking to buy a home here soon should I pay that settlement and how much will it affect my credit score?
Did you stop paying on the student loans more than 7 years ago?
Are these showing on your credit reports today?
Michael Bovee the show closed 0 balance
It sounds like you have not paid on these for 10 years, in which case they should have already aged off your credit and have become zombie debt. More on this type of situation here: ua-cam.com/video/AehXi8m3IT4/v-deo.html
The settlement offers are great. I would assume there are old Navient/Sallie Mae private student loans, as I see these offers like this form them the last couple years.
If it were me, I would work hard to verify when I stopped paying, or when these came out of deferment if I never paid them. If that is more than 7 years, I would be disputing them off my credit, and keeping my 1500.
If the debts can stay on my credit for a little longer, and I am trying to reach credit goals that are important to me, and I have the resources to pay the deal (even in this Covid-19 reality), I would take the deals.
Caution about your credit score. If these are the only blemishes on your credit, and they are many years old. Settling will bring freshness to the negatives, and I have seen that drop a credit score a little bit, but temporarily.
What if the account is not in collections yet but they want you to settle for less
Who is the creditor? What is the settlement offer? How many months late are you with payments?
@Michael Bovee the original creditor was credit ninja but they sold it to p&b group. Balance 3500 and they want to settle for 2100. Its not in collections it's just showing as a Balance on my credit report
@@MichaelBovee it's around 60 days late
If you are able to come up with a lump sum to settle it, I would try for closer to 50 percent.
Be sure to get any settlement deal in writing first, before you pay.
@@MichaelBovee ok thanks
So I have a question, I have a 3 year old account and the original creditor offered to settle if I pay him half. Would that really help my credit?? That’s literally the only negative account that I have and it’s for 700 dollars. What do you suggest I can do? Thx
A paid collection is better than an unpaid one.
It would help you close a home loan, but may not immediately help you score a top tier rewards credit card.
How much it helps your credit score right away can vary.
@@MichaelBovee Thx
My credit report has a credit card that says 200% credit utilization what does that mean it’s been in collection for 3 years now? Should I pay on fill the $600 ?? Or settle
There is little/no benefit to paying in full when you are this late on a bill. If I were looking to resolve an old debt like this, I would settle for less if it were me.
Hi mike got a question i got a credit card with $11,000 limit when i was 19 and maxed out im 23 i still make my payments but still owe $11,000 and its stressing me out my account isnt charged off but i want to get rid of the headache should i settle for less wl it effect my credit in a positive way?
How many months late are you on payments? Who is the creditor?
What if the bank was the one to offer the settlement? I owed 4K but I was paying it off every month. I brought it down to 3k Chase told me if I made a payment of $1,500 they would match the price and it will bring my balance to zero. Was that good idea? Will it still bring my credit down?
Were you already late with payments, or not sending in the required minimum at some point in the past?
Michael Bovee I started to pay off the debt off 7 months after I received the letter in the mail because at the time I wasn’t working. I made a couple small payments and successfully paid off $3,200 out of the 4,600 I owed to the bank. Do you think I should had paid the full balance or accept the settlement? This was a old account that was closed by Chase last year because my debit card was overdrawn. Not a credit card bill.
I would settle the overdraft protection balance and save money if I could. It sounds like it is already hurting your credit, so getting this to show a zero balance and resolved will help.
Michael Bovee I have decided to take your advice and settled it, but I’m worried that it will lower my credit. Also it has never showed up on my credit (Transunion or Equifax) Will it appear later in the future Thank you for taking the time to ask my questions Mr.Bovee
I cannot know if it will show on the other 2 credit bureaus later.
A paid collection is better than an unpaid one.
I have a loan with Avant that's in collections now for$4,000 and one with citifinancial for $4,500 that's also in collections both for about 2 years now. And I also have 2 credit cards both under $1,000. I'm trying to get my score up from 537 enough to buy a home. Will I have to pay these debts off before I can even purchase a home.
It sounds like you are going for an FHA mortgage. They tend to want no more than 2k in unresolved debt in their underwriting.
If I settle without paying in full, will the university still release my transcripts?
I would ask the University what their policy is here.
I have worked on ones that do.
Hi Michael we spoke couple of times and I finally started calling to offer settlements.. i saw alot of online info and on Dave Ramsey community where they said dont give access to ur checking account and make sure to get it in writing does it apply to inhouse collectors? The lady I spoke with told me they dont do those practices.. what's your take on this? I wanted to make sure they dont comeback and ask for more money or withdraw more on my account
Get it in writing before you pay. If you have it in writing, and are dealing with a legitimate collector, I prefer paying from my bank account so that it is traceable and proof of payment is at my fingerprints.
@@MichaelBovee the 1st one I did was my us bank since it's only less than 500. But she said they cant give any letter. I'll get it once I completed the settlement and payment. She played a full settlement disclosure over the phone.. she said they don't scam their clients since they work for us bank and they will get in trouble.. they are in house collectors is that true? I haven't paid yet but I accepted the counter offer
It is not about scamming people by telling them you are going to settle and then selling the unpaid portion off to a debt buyer, or assigning out to collection on purpose. That happened many years ago, sure, but you want things in writing before hand to correct genuine mistakes and errors. And fixing a mistake can be really frustrating in these situations.
I see USBank release settlement letters all the time, many people get them like clock work in the same way you described too. It just would not be my choice. And if I had to, I would record the phone call that goes over the settlement in detail. I would tell them I am recording that too, and even why (they refuse to do a letter in advance of payment).
@@MichaelBovee what form of payment would you suggest if they dont want to send letter or me record the call
No letter before or after the settlement is not a settlement in my experience. But if there is a letter being sent after the payment is set up in the system, were it me, I would use ACH from my bank account and set the payment up far enough in advance, like a week or two, so that mail would get to me before the payment is pulled.
Hello Michael i just called you and i know that you are probably busy with other callers but i will email you . thanks.
I just paid for less with settlement payment but I still see the balance on my account is that common? Can the debt collector charge me fee and interest after settlement payment?
I see it take up to 2 billing cycles for credit reports to update a zero balance owed/paid collection.
Who is the original creditor?
Who is the collection agency involved?
Did you get the agreement in writing?
Ok Michael please help me. Here’s my situation. I’ve owed my Wells Fargo student credit card since 2015. Was my first ever credit card. Only one. It was 500$ limit. Maxed out. I owe them 740$ now but they will settle for 220$. About a 500$ difference which is a lot for me. Should I settle or pay in full? Because it’s been 5 years. Will the outcome be the same if I just settle? I don’t want to pay in full if the outcome is just about the same.
It is going to result in a zero balance owed paid collection on your credit report whether you pay in full or pay less.
If it were me I would settle for less.
Michael Bovee “you are the MAN!.”🙌🏻🕶
I just resolved a credit debt that was 900.00 dollars and they settled with me for five hundred and this debt has been on my credit report still after 7 years, will this still affect me getting an apartment or with moving ? Because i settled.
You should have an easier time of getting approved with paid collections compared to unpaid ones.
If this account has been more than 7 years since you stopped paying it, whether you settled it or not, it should not be on your credit reports.
Have you disputed this as being too old?
Here is a quick resource for doing that: consumerrecoverynetwork.com/dispute-tradeline-diy-credit-repair/
HI Michael - Thanks for helping me thus far - multiple phone calls and emails and always been helpful.. Appreciate what you do!!!! I have 16K with Chase that is reported as 30-59 days late with worst payment stats as 60-89 days late. Citi will settle for 6600 or a payment plan for 60 months for full balance. Question is exactly what you referenced in this video but Im not 90 days late - would like to settle but dont want my score to drop anymore.. currently 536-550 based on agency. Thoughts on settle vs payments - and can i dispute later and somehow knock this off my credit report? Thanks again!!
Your credit is not going to drop much more, and even if it did, it will recover in roughly the same amount of time if you let the accounts go closer to 5 months late (and beyond) in order to settle for a better savings.
Check out this video for more on settling in early months, compared to later months, and if that matters to your credit: ua-cam.com/video/Y7ymhn-26ps/v-deo.html
Hey Michael, quick question. I owe chase $21,000 with super high interest and I am 4 months behind but the account has not been charged off yet. they said it will be charged off in a month. Should I wait for the account to be charged off and pay a settlement? or should I apply for balance liquidation program for 5 years? My credit score has already gone down from 640 to 542. Hope to hear from you soon. thank you so much!
Once an account goes more than a couple months late, were it me, I would be focused on settling for less than a payment plan.
Settling would save me money I don't have, and would help my credit bounce back faster than the hardship plan.
You said R5 damage could you explain R5 please
In the context of this video I am referring to have a paid collection on your credit reports.
I have one charged off debt in my account that is less than a year old. I want to raise my credit score as much as possible within the next six months and I read in various websites that a debt settlement will negatively impact my score. My charged off debt is only $1227 and I’m willing to pay it in full if it means that I can maximize my credit score increase. I want to apply for an auto loan within the next 6 mos and a mortgage within the next two years. I read that I will less likely be approved for a loan if I have outstanding negative balances on my report. Is this true?
It is harder to get a good rate on a car loan with unpaid collections, and you will hear the word no from anyone but the FHA if you try to get a loan through with that debt unpaid on your credit. FHA may still tell you no too.
I do not think your credit score will drop from settling one more recently charged off account. If it did, it would be very brief.
Enhanced Recovery Collections sent me a Settlement Opportunity letter in May original balance from sprint was $662 they offered to settle for $463.......... I did not respond with a VOD they didnt place a collection on my credit until last week and they sent me another one of these letters same exact template just now they are willing to take $30 less lol $430.... since I didnt respond the first letter within 30 days with a VOD is it too late now?
I sent a reply to you via email from the ask a question submission made on the website.
hi Michael. two questions :
1. my credit score is 584 and I'm trying to get it between 620-650 for an apt. how can i do this in 2 months? btw is paid /settled everything except 2 accounts.
2. one of the negative accounts (Sprint) is $338 and had been there just over a year. if i pay that will my score increase enough?
I cannot say whether your score will increase enough. But still having one unresolved account would likely tamp down credit improvement. What is the second account all about?
I had a Kohl’s Capitol one cc gone as charged off/collection with a debt of $594. On my Experian and credit karma it showed I had a balance. It never went to “0” even after it was charged off. I desputed it. And after it was resolved they updated the balance again and now my credit took a hit. So I just decided to pay it off today in full to the original creditor(Kohl’s C1)so that the balance can go from $594 to 0. Was it a good idea? To pay directly to the original creditor?
If a balance was still being reported by Capital One as being owed, than it likely was not sold off, so sending the money to Capital One should be fine, and get the result you want.
@@MichaelBovee thank you for the reply!
Michael Bovee so after taking a huge credit hit to my Equifax. After my 2016 charged off got updated. I paid the debt in full to capital one a week ago . I called Equifax 2 days ago . And they don’t see that charge off. Or the Kohl’s/Cp1 account.Would that be becuz it was deleted?im so lost. He went through my whole Equifax list of enquirers, credit cards ect. And no Kohl’s C1.
I received the following language in a settlement agreement, is the selected language sufficient to protect me legally after paying agreed amount? thanks in advance .
-------On 02-27-19, United Collection Bureau, Inc. agreed to accept the sum of $3714.40 as a settlement on the above referenced account. Payment(s)
must be made as agreed, with the final payment to be received by 02-28-19.
I would be okay with that settling my own debt depending on the rest of the letter. It is expired though.
@@MichaelBovee I will be sure to have a re-newed date before paying. Odd or dumb thing is, they sent me an agreement at 6pm of the same due date. Do you think that was by design to make going after balance or re-selling later? Needless to say I wasn't going to pay on an expired agreement . Glad to hear you think language is sufficient for legal cover. Greatly appreciate all your service and work. Thanks very much for your reply.
I have a situation that I’m lost about... I have a “charged off/written off acct” it is a couple years old and the balance is roughly 7k. I called to see what I was eligible to do. The rep I spoke with said I can settle the debt with a lower payment of 1,588.00 in 3 payments. I asked if I paid would they delete the account or delete the remarks on the account. The rep said they can only put the debt as settled or settled for lower amount. Should I pay the settled amount and risk my score not going up to just pay a lower amount? Also should I risk receiving a 1099c? Help! I don’t want to set myself up for failure.
Pay for delete is mostly a thing with a few large debt buyers, and not banks or original creditors. Who is the creditor you are settling with?
Is this the only unpaid account on your credit reports? If it is, and you resolve it to show a zero balance owed, while taking other steps to improve or rebuild your credit, it should go up, not down.
If you have more unpaid debts than this, taking care of only one will not always yield the credit bump we want.
Settling should result in a 1099c being filed. It is not a risk, but more an expectation. You may not owe tax though, more on why that may be here: consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/
Michael Bovee
I have 6 total accounts on my credit. 4 of them are negative. Listed below are my negative accounts. I’m trying to get it all taken care of to boost my credit score and get the negative off.
West lake Financial Services (car loan)
Charged off account/unpaid balance charged off.
High balance: $14,125
Open date 10/2018
Closed date 4/29/2020
Balance owed $7,944
Settled amount $1,588 in 3 payments
First Premier bank (credit card)
Charged off/unpaid account charged off
Highest balance $575.00
Open date 6/2019
Closed date 1/13/2020
I spoke tried calling first premier and they wouldn’t talk to me as they sent it to a collections agency. When I called to settle pay to delete the rep said she couldn’t do anything because they don’t report to the credit bureau. I would have to go through first premier. Every time I tried to call FP I couldn’t get through because my debt was being handled through the other company.
EdFinancial (2accounts)
Owe $3,943 for both
Account is “pay as agreed”
Open date 7/2016 for both
When I called the rep said automatically I was enrolled into a forbearance plan because of covid 19. My first payment won’t start til January 26th 2021. I asked if I could settle for a lower amount or pay what I initially borrowed. She said no unless I qualify to have it as a forgiven debt. Which I don’t. My husband and I are going to start paying this off little by little each week.
Michael Bovee
We also plan to pay the west lake that settled the amount for lower. If we do pay it off will this even help my credit to go up? It will still show the negative remarks and I’m concerned that the could keep the original balance on there even though we settled for a different amount.
Get all settlements in writing before you pay. If they continue to report that you owe money a month or two after you paid the agreed amount(s), and by the required deadlines, you can dispute those off, file complaints, and even take them to court. And you will have the proof you need.
That is several negatives you will want to manage. Once you have, your credit should improve. When you are ready to make progress with improvement, here are some things to follow: consumerrecoverynetwork.com/question/how-best-repair-credit-score/
What if I was never late--I just want to settle for a lower amount.
It is not common to be able to settle for less without being late on a credit card or loan. There are a few banks you can have a conversation with about your hardship, such as Chase, who may offer to reduce your debt by 10% for a lump sum settlement payment. But most of us in a hardship would need more than a 10% reduction to be able to pay the account.
Your credit takes the hit from settling a debt when current.
Hi Michael, I just found your channel and have a question. About a month ago I started preparing to purchase a home. When doing this, I pulled my credit report and found I have a negative charge off account from Synchrony Bank for my Paypal MasterCard. I have never been late so I called them. I learned that they mistakenly marked me as deceased just over a year ago and automatically charged off my account at that time. I had never received anything from them regarding my account. I have always, and continue to make on-time payments on this account. I have asked them to correct what they are reporting on my credit report, but they will not change anything. What can I do? I don’t feel I should have a negative mark on my report since I have done nothing wrong and pay my bills on time. FYI I live in Nashville, TN if that matters. Thank you for your help.
I would file a complaint with the CFPB. More on that here: consumerrecoverynetwork.com/filing-complaints-with-the-cfpb/
I would also look for an experienced Fair Credit Reporting consumer law attorney in your state. You may be able to get what you need with one well written attorney letter.
You can also dispute this with the credit bureaus directly. More on that here: consumerrecoverynetwork.com/dispute-tradeline-diy-credit-repair/
Awesome and very informative videos!!
I have alittle over $1000 in medical bills that has been in collections for about 4 years now.
They are all for the same hospital but sent to two different collection agencies. I called the local office of the collector trying to pay a lump sum and have it deleted. I was informed that I was unable to do so due to their policy because I previously contacted them 3 years earlier about the same thing and didn’t agree to pay it then.
The hospital is willing for me to pay them directly and told me it will with drawl it from collections,do I try and negotiate with them to a lower lump sum? Pay in full? Then contact the credit bureau to have it taken off. Or will paying it buff itself out ?
I often find that once the account is pulled from collections they can be removed as they are not involved any longer. And that the hospital or service provider wants full payment.
Paid medical bills on your credit no longer hurt they way they used to though, so I would not be too hung up on it.
So do I settle or just keep my money in my pocket and wait till it drops off in 7 years ?
When did you stop paying?
Who is the creditor?
Michael Bovee truck driver school loan it was 2 years ago and some other stuff that’s 4 years ago
What state are you in?
Do you have any financing goals coming up where you need to clear up your credit? What are they?
if we settle an account should we ask for a deletion letter from the collection company "?
Who is the creditor?
Who is the collection agency?
Just got a lump sum settlement offer from my bank. I owe them 1,600 for my credit card and they are willing to take $400. I haven’t been making payments for about 2 years now and it’s been charged off. They are saying it will reflect as “settled” in my credit report once I agree to pay the $400. Is there any way I can have them change it to “paid as agreed” or “account closed” or should I just accept it as “settled”? Which one will help my credit score go back up? Thank you!
Those words are not affecting your score as much as it being updated to show it is no longer owed, and a zero balance now.