I have an old cell phone debt on my credit report. Would it be okay to settle it for less, or should I pay it off in full?

Asked by CarmenSM, Saint Louis, MO Sun Aug 12, 2012

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Dan A, Home Owner, Lemay, MO
Mon Sep 3, 2012
Hi CamernSM,
I work as a Ligitation Manager for a Loan Servicing Company and Collection agency.

Firstly, do you know the date of delinqnecy on the debt (when was the last time you made payment)? Your credit report should show it.

That's kind of where it becomes tricky and you might have more options than you thought - but might not understand the ramifications of them.

If it's really old - say almost 10 years old? - then the statute of limitations on it will run out and the CRA's (Credit Reporting Agencies) will just drop the tradline form your CBR.

If it's not that old, and you settle it - CRA's typically mark the tradeline on your CBR as "settled and closed or a lessor amount." Now, although it's closed, the tradeline is still there. Some creditors may perceive this as "She took services and then only paid 50% back."

With that said - you can also pay it in full - but again, it will still show on your CBR for years as "Collection Account Paid", or a P9 account status code.

Maybe try this first - contact the cell phone agency or collection agency their using. Block your caller ID (or they'll document it and then start calling you about it since they know your number.) Speak to a member there and try to negotiate that if you paid the entire balance, in full, over the phone (via debit card,credit card, whatever), then they woudl agree to COMLETELY remove the entire tradeline. I'm sure many will say, "No No No, we cant' do that - it violates the FCRA." - So, wait until the last full week of the month when every agency is scrambling to hit their goal - call in and offer it again. But before you pay - GET THE AGREEMENT IN WRITING!!!!! Then pay it over the phone, and hopefully if they do stay within the lines of the law as our company does, you'll see it disappear in a matter of 30-45 days.

Hope that helps in some way.
1 vote
connoranne, Home Buyer, Mount Laurel, NJ
Earlier today
it depends if it hit your credit already, i know i had to go with a company called select us as per my mortgage rep so i could get approved. they deputed mine because it had already hit my credit and had got it removed so i could get approved for my home! best part about it was that they had it done and i was in my home in less then 5 months
0 votes
, ,
Thu Sep 27, 2012
Good morning Carmen,

Best course of action: Meet with a Local Mortgage Banker. The Mortgage Banker will review all facets of your loan request to answer your questions with regards to the types of loans and maximum loan amounts you could qualify for. If that account needs to be paid, your Mortgage Banker can advise you. If you are not qualified at this time you'll receive excellent guidance on the steps you need to take to prepare for homeownership in the future.

Trevor Curran
NMLS #40140
0 votes
Tonja Neal, Agent, Saint Louis, MO
Fri Sep 7, 2012
Try obtaining score. It may not have hurt you as badly as you think. Plus, there are multiple programs that can help you. I know a good one. Contact me that can either help or get you going in the right direction fairly quickly.
0 votes
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