Is “settled” synonymous with Closed - Credit Repair Forum from Creditnet
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  1. #1
    Alex_I is offline Member
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    I have an MBNA account that was settled on 3/99. The account was never past due before settlement so it’s listed on all files as R1 “pays as agreed”. Now under the payment history in EQ it shows “Settlement accepted on this account” The account doesn’t show up as closed, although it was closed since 3/99.

    I am wondering if the sentence “settled” is synonymous with “closed”. Or does listing it as settled means it has to be closed? I am thinking of disputing it on the basis that it should be listed as closed. May be they will end up deleting the tradeline completely.

    In EX, a creditor note is shown saying that the account was settled for less than full amount. The account status otherwise looks fine. It is listed under positive tradelines :-)

    Any comments?

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  3. #2
    mindcrime2 is offline Senior Member
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    Re: Is “settled” synonymous with Closed

    You don't want "settled" on your reports. It means you settled with the creditor for something like: actual owed bal: $1000 / settled for $500(acc. now considered paid), when account says settled it usually means closed as well.
    ~mindcrime~
    A.K.A. MC2
    It's all in your mind, or is it?
    Notice to Collection Agencies: CN is about to kick you back into the dot-matrix age.

  4. #3
    Alex_I is offline Member
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    Re: Is “settled” synonymous with Closed

    That account was actually settled for less than full amount. However it was never past due before settlement.. I mean no payments were skipped before settling the account.. So having the account listed as settled is correct.

    My only concern was that, should it show as closed beisdes settled?

    Thanks

  5. #4
    mindcrime2 is offline Senior Member
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    Re: Is “settled” synonymous with Closed

    When an account shows as settled, it would mean the account is now closed. An open account cannot be settled, its one or the other. You said its listed in the positive section, which is good, however, on a manual review it would not look as good because "settled" means you didn't pay off the full balance, whatever it may have been, you "settled" with the creditor for a small amt, for whatever reason.
    ~mindcrime~
    A.K.A. MC2
    It's all in your mind, or is it?
    Notice to Collection Agencies: CN is about to kick you back into the dot-matrix age.

  6. #5
    lbrown59 is offline Senior Member
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    Re: Is “settled” synonymous with Closed

    Never settle without written agreement that account will not be reported as settled!
    Originally posted by mindcrime2
    When an account shows as settled, it would mean the account is now closed. An open account cannot be settled, its one or the other. You said its listed in the positive section, which is good, however, on a manual review it would not look as good because "settled" means you didn't pay off the full balance, whatever it may have been, you "settled" with the creditor for a small amt, for whatever reason.

  7. #6
    PsychDoc is offline Senior Member
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    Re: Is “settled” synonymous with Cl

    Yes, settled is synonymous with closed. However it also means more than that. It means you didn't fulfill your obligation to pay back your debt, and this will definitely kick your credit scores down a few notches. It should be your goal (if you're attempting to improve your credit files) to get this paid creditor to remove the derogatory and to report it as simply "closed, paid in full." It may take some work, but you can certainly work toward that.

    If this happens to be a Capital One card, they often change old settled chargeoffs to R5 (Equifax's code for 120+ days late) which is a far sight better than the R9 that accompanies both settled/closed as well as completely charged-off accounts (or any collection account, for that matter). With Cap One, your first step would be to get them to change the listing to R5; then six months or a year later you could work on them to reduce that R5 to an R2 or R3.

    I realize that you're probably not talking about a Cap One account, but I mention them just to illustrate the point that many of these companies are workable -- either through the nice guy approach ... or not. :)

    Doc

  8. #7
    Alex_I is offline Member
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    Re: Is “settled” synonymous with Cl

    Thanks for the replies..

    I did settle the account about 3 years ago as I was in a financial trouble at that point. I didn't care much at that time about how it is going to be reported.

    However, it is reported in all 3 files as an R1 account with the notation or comment that it was settled for less than full amount. I believe that it is reported this way since it was never past due before the settlement..

    I am sure that having it listed as settled is hurting my score but hey it shows as R1 as well. So I am kind of reluctant to dipsute anything about it beacuse I may end up with a worse listing.

    I am not sure if trying to call the creditor (MBNA) to have them delete or change the listing would help or not. I have been a lurker here for a while and it seems that MBNA won't budge easily.. It was actually very hard to negotiate a settlement with them 3 years ago as no one wanted to settle a current account.

  9. #8
    mj
    mj is offline Senior Member
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    Re: Is “settled” synonymous with Cl

    Settled is about as bad as chargeoff.

    Some people report that you won't be able to get a new mortgage or refinance until you resolve the settled to paid-in-full.

    My partner "settled" with Citibank - and while he's on their blacklist, I made sure that part of the settlement was a deletion of the account from all CRAs (in writing).

    You may just have to wait the 7 years .... after 5 it won't hurt your score so much.

    Good luck,
    MJ

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