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What will really happen to my CR if I settle?


tydaddy
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For all of you out there who have settled on cc accounts with OC - what really happened to you in the process? How much did it affect your score? If you were issued a 1099 how much did you have to pay in taxes towards the unforgiven amount? How much did it affect future creditors that looked at your report?

We are about to settle on one of our accounts and I wanted to find out what the real disadvantages are. THe account has MANY MANY lates reporting and has already affected our credit score. Currently there are positive lines that are reporting on our CR and I am just wondering if it is worth saving the extra $ to settle for a lower amount.

Please let me know how it all worked for you.

THank you!

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A settled CO or settled collection does almost nothing to help your score. FICO considers the fact that the CO or collection happened at all to be the important factor, not the fact that you paid it. Trashes your score

You pay whatever your rate is in taxes on the forgiven amount for the year the 1099 is filed. Somewhere around 30% of the forgiven amount.

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