Charge Offs / Settlements
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| Thu, 10-28-2004 - 8:28pm |
I noticed on my credit report there is an account listed as a Charge Off and the account is closed. I have no idea what the debt is about but I would like to fix that blemish.
My question: Is there any way to contact that company and arrange to pay them or am I stuck with a charge off?
Question 2: Someone told me that it was bad to accept settlements. Would it reflect badly if I accepted a settlement and paid the people off or should I struggle and pay off the whole debt. All of these accounts have been dormant for over years so it would seem like the companies would be satisfied to receive a settlement... This whole situation has me confused. I have always been a cash only person and now that I'm about to land the job of my dreams - this pops up. *sigh* Thanks in advance to all that respond.

You can still contact the company and make arrangements to pay a charged-off debt. Instead of charged-off with a balance due, it will show on your credit as charged-off but paid in full.
Settlements are bad, because the company is getting less than the full debt repaid, so they still have a loss. Anyone looking to give you credit in the future will say you are more of a risk because you didn't pay your debts in full. But a settlement is better than not paying it at all. I think settlements usually happen for charge-offs, so the thing is going to be on your credit for years anyway. If settling gets you out of it and allows you to focus on other debts, then I wouldn't loose sleep over it.
I think charge-offs are bad to have on your credit (they kept me from getting a car loan for years), but charged-off and paid by settlement is only slightly worse than charged-off and paid in full, and both are better than charged-off but unpaid.
Hi there!
All my best,
Danni