Credit card debt negotiation means it’s time to negotiate what happens to your credit report with the creditor.
This is extremely important since a “paid” collection can be as bad to your credit rating as an “unpaid collection” if reported in a way that isn’t in your best interests.
All your efforts and money will be useless in rebuilding your credit report if you forget to negotiate the reporting to your credit history throughout the process.
1. You need to aim for a perfect or near perfect rating.
Your ultimate objective in negotiating settlement is to protect/improve your credit rating.
Your goal here is to get the creditor to register your credit rating after the settlement with a notation of “Paid as Agreed”. Something less will negatively influence your credit score.
2. Creditors make money by collecting bad debts, not by registering negative credit data.
Since creditors usually understand this vicious cycle, they are often willing to erase any negative information after the credit card debt negotiation has been completed.
But, you should also understand that creditors don’t intentionally degrade your credit rating as a personal revenge. If it is in their best interests to collect from you and bring your rating back to perfect, they will certainly do so.
Talk with them to discuss your account, and how the two of you can come to a mutually satisfactory arrangement to settle you credit card debt via negotiation.
3. Collection agencies are always more willing to erase the negative mark compared to banks and other financial institutions.
The reason is even if they do change the rating, you still have the original report mark by the creditor.
Since the beginning of the year I have made it my goal to get out of debt, not that I was drowning in it but it was to the highest level I had let it get in my lifetime.After some research online, talking to co-workers and just doing the math I decided to attack my debt from lowest to highest. I paid off my first credit card, only $500, within a month from working all the overtime I could and living within my means.
I have always been an avid couponer so it’s not like my family will go hungry because I never spent money on food, but I did need to cut corners on travel, alcohol, and eating out to save.
Closing out that card got me to believe more that I could do this and since then I paid off my next card and now I am starting to tackle my car!
Posted by: Tammy
4. Convince the collection agency to remove their notice from your report fully and get the original creditor to modify the rating to “Paid As Agreed.”
Even in the worst case, keep in mind that you have the legal right to demand removal of the collection agency notice from your report.
Some debt collectors tend to say they can’t control what the creditor might do with your credit report. While this might be true, nevertheless, the aim of the debt collector, as well as the creditor, is to have their money back. NEGOTIATE!
If the collection agency gets its money, so will the creditor, which means that it is in their best interest to collaborate with you on your credit card debt negotiations.
I thought my life was ruined, I was so far in debt that 90% of my take home salary needed to be paid to the credit card company!Not knowing what else to do I called them if nothing else to tell them that I was unable to pay any further. To my surprise they were actually very pleasant.
I explained to them my current situation and that I had just been furloughed from my full time position. They set me up with an adviser and said that as long as they could verify my situation they would work with me to make my payments do-able so that I would not harm my credit rating.
We had several long conversations and I had to fax them some information but in the end they reduced some of the debt and adjusted the terms of my payment, I am now able to make the payments. It is still not easy and I will be paying for quite some time, but it is better than the alternative.
Posted by: Sara
Tell the debt collector to get it in writing from the creditor, and you will pay them their money. Most creditors (and debt collectors) will be happy to provide it in writing.
However, keep in mind that not all collection efforts will come from credit card debt. For example, a doctor bill cannot show up in your credit report. Nevertheless, collection attempts on these accounts may be included.
What if the creditor insists you take a hit on your credit report?
Be prepared to face creditors who will require more pressure before they will agree to remove a negative hit from your file. Sometimes, they may seem absolutely unwilling to negotiate this.
But again, keep in mind that the majority of creditors are willing to negotiate if you make contact with the one who has the negotiating power. You just need to have a calm nature and make a determined effort with your offer. If your attorney can’t make the creditor go for the full removal, here is what you can do:
Request it be marked “Paid” without other notation. You can ask the creditor to note a “Paid” making instead of having to remove it altogether.
Besides representing account status, a lot of creditors will almost certainly go along with this notation. But remember that “Paid” is considered a negative for an account that’s gone through collection or includes other negative notions.
Try for a listing on your report as “Settled”. Instead of deleting it altogether, you can request the creditor indicate “Settled” on the debt. This note is basically a negative but not as much as having “Paid Charge-off.” Therefore, you should accept “Settled” only if all other options are exhausted during credit card debt negotations.
In fact, “Settled” could still generate a credit rejection, but the new creditor may also ask for an explanation, giving you the opportunity to explain extenuating circumstances. So, agree to this only if you can get other negative marks removed too. And of course, even after this, you should continue to try to remove the mark through the credit dispute process.
I owed about $4000 which included interest and late fees on a credit card I got while in college. Due to delinquencies it was sent to collections and so they started calling me about paying it off.They initially offered me a payment plan of about $250 a month but I since I was unemployed at that time I couldn’t afford that. They then asked me if I could do a one time lump sum payment of $2500 or three payments of $1000 each, they would accept that and close my account. I thought that was a reasonable offer so I asked to call them back after I made my mind. A day later I called them back and paid $2500.
I will definitely negotiate again if in a similar position in the future although I don’t plan to be. Collectors expect negotiations and therefore over charge their initial offer, they also know I make the final decision. Since going to court is a long process and can end up being more expensive than the debt, they were willing to work with me which gave me a little more negotiating power.
Posted by: Brenda
Should you accept a “Paid” with “Charge-off”, “Collection” or “30-90 days late” notations?
Although this is the creditor’s original entry, it should be your last of all options regarding the marks in your credit file.
If you can’t get it changed however, it can still be a good idea to pay off the account even though the creditor won’t budge on removing or positively changing the bad listing. You can always try to remove the negative marks after payment via the dispute process with the major credit bureaus.
These credit card debt negotiation tips will help you when it comes to protecting and improving your credit report. They will take time to do however; so if you don’t feel you have the time to spend on this, hire a reputable debt negotiation specialist to do it for you.
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