$5K in CC debt that I can pay off - but should I?
Hey All, I have about $5K in credit card debt that is in collection. I've been out of the country for a few years and frankly I was irresponsible and I let it slide. I'm currently saving up to go back to school for a master's degree. While the bulk of the tuition is guaranteed, I will likely have to take out money for personal expenses. Obviously this $5k in debt collection is likely to hurt whatever rate I can get. Am I better off paying off the $5K I owe right now and hoping there's a quick bump in my credit score (which is currently ~665) or am I better off saving the money and paying off the $5K when I've got more money? Any help is much appreciated! -TW
Why don't you see if you can negotiate for a payoff of 30 to 40 cents on the dollar? If that doesn't work, maybe they will accept 50 to 60 cents on the dollar. I helped my son get a 50 cent on the dollar settlement. His only penalty was he can't ever use that particular credit card again. No big deal as he has another one he uses exclusively and his credit score has shot up considerably.
Just thought.
Thanks for the reply sandalwood!
Frankly, I had no idea such a thing was possible. I take it that he'll not be able to get Company X's VISA but could still get Company Y's VISA?
My debt is to an Amex card, and I'd rather not be blackballed by them for all eternity... I actually like the company, I just moved overseas and got in over my head. I'm thinking that a full payoff is my best bet.
Here's a question: with this paid off in full, will I see my credit score increase immediately (or at least within a month?). - TW
Paying it off in full doesn't mean your score will rise. You have to have a positive notation in that particular trade line. In other words, since you already in default with them, you must have them remove the default status. If you decide to pay them in full, be sure you get their written agreement on a positive notation for that trade line before you send in the money. That way if they don't make the proper report you have ammunition to get the CRAs to change it.
My personal, unprofessional opinion is to try to negotiate the debt down and have them mark the account paid in full as part of the negotiation and as sandalwood suggests. It's never a good idea to have that sort of thing hanging over your head if you can help it. This way you can move forward.
MHJ
Rep Points: 350
Pay it off before something negative happens. Probably the worst thing anyone can do is pay a credit card late because it can lead to boosting your interest rate to a very (unfairly) high level.
If you were to settle debt with a collections agency, who should you speak to there about either putting down that it was paid in full or to put a positive notation on it?
MHJ
Rep Points: 350
Are you currently making any payments of any kind right now? How many payments have you mad recently?
Advertising isn't part of what this forum is about. Hence, the above post was removed.
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