Question:

How Should I Pay Of This Debt?

by Guest58461  |  earlier

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I have 1 question. What is the difference between settling a debt for a settled amount(example: $4,000 debt settled for $1500) and paying the debt in full? What I mean is, which option will make your credit look better? If I settle will it make my credit look bad? Or does it not matter as long as you get the debt paid off?

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9 ANSWERS


  1. if you're not in a rush to get a car or buy a house, which would require a good FICO score so you have a low interest rates, then i would go and pay the 1500.

    if you are getting car/house, then pay 4000 off as quickly as possible. settling negatively effects your FICO score


  2. don't settle unless that's the absolute, and i mean absolute last means of resolution.  it can be placed in the same bucket as a charged off account, which is derogatory and will hurt yoru credit. if you want to pay it off and pay off faster, start selling stuff or get a second job dedicated to paying your debt down.

  3. settle the debt.....if you are past due and it's on your credit report -it won't make a difference - I have settled many and it saved a lot of money......

  4. AC

    hi I actually own a debt/credit consultation business. and the above answers are true in most situations. But if you settle debt There are ways to have it not reflect poorly on your report.

    If you would like some free advice give me an email at agdconsult@gmail.com

    im Aaron

  5. Hi,

    I used "Credit Solution" to settle my debt and avoid bankruptcy.They managed to reduce my debt up to 58%.It's legitimate.I came across this company on NBC News Special Edition.Check it out here:

    http://memurl.com/furetu

  6. If you settle a debt it will hurt your credit score.  It would be better to make monthly payments to pay off the full $4000.00.  Making on time monthly payments will reflect better on your credit report.

  7. If this debt is currently in good standing, a settlement might hurt your credit, depending on how the creditor reports the settlement.  

    If this debt is already showing as a derogatory item, paying in full is only slightly better than settled.  However, paying old debt won't improve your score.  In fact, it will initially your score.  The older the item, the less impact.  When you pay old debt, it becomes a current transaction and counts more in your score calculation, including all the negative stuff.

  8. U MAY wanna check out an advertsed website called feedthepig.org. the tips r that U pay yerself B4 any 1 else, & consider cutting up a credit card & tell a friend 2, also. U should ALSO put away parta yer paycheck every single payday. this should B done 1'st B4 paying any 1 else u owe. failure 2 do so will result in yer NOT B'n able 2 eat or yer neglecting yer immedi8 household's needs.

  9. It will show up on your credit report as charged off, with a balance.  That's bad.  Just try to arrange monthly payments, and as someone else suggested, if you have to get a part time job for the time being to help pay it off.

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