Negotiating Your Score
In addition to negotiating a dollar amount for a settlement, you should use
the negotiation to manage the effects on your credit report as much as possible.
Ideally, you would like:
- the collection agency to remove its listing from your credit report entirely;
and
- the original creditor to show your bill as “Paid as Agreed,”
or “Account Closed/Paid as Agreed.”
At the very least, you want any derogatory remarks taken off your credit
report, and you want the account to be listed as “paid in full,”
even if you have negotiated a reduced settlement. Ask for these things when
you offer to settle. And get the collector’s response in writing.
Worst case scenario: You might agree to have the original creditor show the
account as “settled,” if any negative comments, such as “charge-off”
or “collection” are removed.
“Settled” is not the best way to have an account listed on
your credit report. Having a settled account can trigger a denial of credit
later on.
You may be able to have the account removed from your credit report once
it has been paid, if you use the consumer reporting agency’s dispute
process.
Next: Once You
Have an Agreement |
