Hi guys, can anyone tell me the difference in reporting done to Credit Bureaus for a Settlement of 50% or a clear charge off. The amount is 6,000 and both will be reported but what is the difference in the score/value change?
Also if already off of cccs and now can work with the debtors direct…Is it a good idea to return to CCCS? Fab
The wordage that the creditor’s will use when you settle will vary as wildly as there are companies.
Most will state something in the order of “settled as agreed” or “paid as agreed”. This is a negative on the credit report as far as scoring goes.
How this actually will affect the scoring is not known as the the for-profit company that runs the software for derterminign this score (Fair Issac, Co or FICO) keeps this confidential.
When you do a settlement you are put into the credit category of R9 which means charge-offed account. When you are on a CCCS you are put into the category of an R7 which means in a management program. This is the same category that Chapter 13 bankruptcies are put into.
CCCS have often been called a poor man’s bankruptcy. See why above.
Usually, when you leave a CCCs on your own choice you can return back to it, but not all the time. If you have been kicked off for one reason or another, usually you can not rejoin again.
Most banks will see that you are doing a CCC again and will not allow you to do the program even though the CCC accepted you. That is your biggest danger if you decide to re-join a CCC.
But, as I have said many times…if you can afford a CCC then you don’t need one. There are other, more beneficial programs that will not hurt your credit and provide a much better service.
Hope that this helps.
I’m new here and was hoping you could expand on this statement or point me to some reading. What sort of programs? I don’t feel I need a CCC, I make my payments and snowball one CC at a time. But I am very concerned about the impending minimum payment jump and what’s going to happen then. I understand I got myself into this mess and am working hard to get out…just seems like a never-ending battle someday.
“if you can afford a CCC then you don’t need one. There are other, more beneficial programs that will not hurt your credit and provide a much better service.”
If you really want an education on debt reduction and some answers to your basic questions, please visit the recent archives section of this Group’s website. Read the messages from the last 2 weeks and you’ll gain an education.
Good luck and let us know if you have any questions that aren’t answered there.