Ok, I hate Discover card, but here is my question about my credit card. Credit Limit - 00 Currently owe - 00 (cause of late fees. overlimit ect) My Credit Report shows on this account under Negative Accounts - Status: closed/Current, was past due 60 days Rightnow Discover is not charging me late fees and overlimit fees, but they are charging me finance %. If I can make them in writing for a settlement of 00 which was my original account balance, can this lower my credit score? This card by the way is my only bad one which was open back a few years but never got to pay it off - NOW I DO!!!! THANKS
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it will pull down your score, but it already is, what you want to do is pay for it, and it will show account settled for less than the amount owed. MAKE sure you stay current on everything and inside of 12 months your score will come back up. DO NOT open any newcredit, DO NOT charge up cards anymore. DO pay more than you owe on current cards to keep balance limit ratios low
Has this account officially been charged-off as bad debt? How old is this debt and when did you default on it? If this has account has already been charged-off, the main damage is already done and paying a "settlement" will not undo the damage of a charge-off. Any increase in your credit score would be negligible. Per the Fair Credit Reporting Act, a charge-off, whether paid or not, can remain on a consumer’s credit reports for up to seven years. It will simply be updated to a "Paid/Settled Charge-Off," which, while slightly better, is still a seriously derogatory item.
If the account has not been charged-off, it is in your best interest to prevent this from happening as charge-offs are a big hit on your credit report.
If this is old, charged-off debt that is older than one year old and neither Discover or a debt collector has been engaged in collecting on the debt, then I think it’s best to leave things be….Renewing contact with collectors over old debt can trigger bad things: aggressive debt collection activity or even a lawsuit…It is my opinion that this risk is not worth a tiny increase in a credit score.
If Discover closed the account and you are current in payments on the balance, it is very unlikely that Discover will accept your settlement offer. They really have no incentive.
But if they were to accept your settlement offer, it would show as a charge off and that would lower your score. You would also get a 1099 for the forgiven portion and would have to add that to your income tax return.