Hi everyone, I had a credit card 2 years ago and I (carelessly) never paid off my $1600 balance. The bank handed it over to a collection agency who called me today and gave me options as to how I could clear that balance. To make a long story short, I can settle with the collection agency and make 1 large payment of $1100, saving me $500. Or I can pay off the original $1600 through a payment plan. Both options will clear my balance and change the rating from R9 to R5. My question is, is there a difference between me paying off the original balance and 'settling' with the collection agency. I know both options will show different things on my credit report, but how much of a difference does it make, if any? Thank you in advance for all your help! PS. I'm not sure whether or not this makes a difference, but I am located in Canada
R5 is 120 day late. A R9 is charged of to bad debt. So a R5 better than a R9 depending on what is on your credit report you should a small increase in your credit score. Thanks! Heather with BootMyScore.NET
You could also counter-offer to pay the debt in full in return for a Pay for Delete to wipe the bad debt from your report completely. It sounds a bit unlikely in this scenario but you certainly have nothing to lose by offering. Here's a sample PFD letter if you're interested.
The Collection Agency Paid about 5 Cents on the Dollar you can Probably Settle for 15 cents on the Dollar or Write them a Letter tell them to send you a Written Offer, When they Respond you have 30 days Then tell them to VERIFY the DEBT this will Probally Stop them
