Hey all, I'm new to credit repair, and so when I called my creditor yesterday (Care Credit) I was really excited to be offered a settlement amounting to more than 1/2 of what I owed! The account is in the process of being sent to a 3rd party CA and the settlement would change the "charge off" status to "settled for lesser amt" which is not ideal, but its progress. All I needed to do was call him today with my bank info so that I could set up the monthly withdrawls. Well...stupid me for NOT GETTING HIS NAME!!! I don't know what I was thinking, seriously? Anyways, after being on the phone for about 2 hours this morning trying to figure out who authorized this settlement, he was never found. The GHOST employee at Care Credit. So, I was offered a different settlement, for twice the amount of my original. I asked for it in writing before I gave any sort of financial information, which they obliged. And this time, I documented EVERYTHING! (too little too late though). I am so upset that I now have to fork over DOUBLE my original settlement. I know it's my fault, but I now have 30 days to come up with $2400. I think I should be able to do it, but if not, how big of a difference does a "settled for less" status make over a "charge off" status? I mean, are we talking 100 points? Or is this something that isn't going to be TOO significant of a difference in scores? Thanks guys!
Total bummer! Documentation is so key in this process...unfortunately you've learned the hard way that you just can't take anyone's word when dealing with a creditor. A "paid charge off" or a "paid settlement" will basically have the same negative effect on your FICO scores, so I wouldn't worry about that too much.
Thanks Josh. So a "settled for lesser amount" isn't any better than "charged off" status huh? If this is true, I may just get $1200 together, wait for it to go to the CA, and then call them before they start reporting or offer them $1200 for a PFD. Care Credit told me that if it goes to a 3rd party CA, they will give me the name of that agency right away. Then, after its cleared up, I could just dispute and GW care credit over and over until it hopefully was removed. Does this even sound logical? I mean if paying the $2400 for that settled status will actually benefit me, I'll try my damndest to pay it. But if letting it stay charged off will give me the same results, I may have more luck negotiating with the CA.
From a lender's standpoint, a "settled charge off" sounds less like a deadbeat than an "unpaid charge off".
That's nonsense. It is the fact that the account went unpaid long enough so that the OC charged it off in the first place which makes your credit scores go down, and makes prospective lenders unwilling to extend credit. Even if you subsequently repay the debt in full, the damage is already done, which is why it makes sense to try and settle for as little as possible (or to pay nothing and wait out the 7-year reporting period).
It is true that underwriters will look more favorably upon settled accounts or paid chargeoffs, even though your FICO scores might not see any improvement. To the OP-I would be cautious about letting this fall into the hands of a CA. You'll likely end up with an additional negative hit on your credit reports and the CA could be much more difficult to deal with. If you can take care of it while it's still in the hands of the OC, I would do it.
