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Best way to pay an OC in full for a charged-off card


phoenix_rising
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Well, folks, I am almost at the end of the debt road here and ready to start my way back up the credit ladder. I've paid or settled all of my accounts but one, which is a store charge owned by GEMB. I had two accounts with GEMB and one, for $900, was sold to Arrow. I paid Arrow in full for it last month. The other, from an electronics retailer, has a balance of $4,000 and I am paying it in full next week. For some reason, they are still showing as the account holder on my CR with all 3 bureaus... they never sold it off or gave it to a collection agency. They do not know I plan on paying them- I have not heard from them AT ALL. No letters, no nothing. (It could be they have tried to call but I changed my number a year ago.)

Which brings up the question- HOW do I pay them off and get the transaction to help my score? I settled a chargeoff with Washington Mutual last month, 50% on a $6,500 balance and fortunately my score only went down 9 points when the settlement posted and my balance hit zero. I think perhaps the negative effect from the settlement and the positive effect from removing so much from my debt load may have cancelled themselves out somewhat.

I would think they would be doing cartwheels over getting this account paid in full and would be willing to bend a little. My thoughts are something along the lines of calling, asking for a supervisor and explaining that "I want to do the right thing and pay this completely, but I am trying to avoid re-aging the account when I pay you, would you agree to delete for payment in full?"

Any and all input is welcome- help me out! Anyone have experience with GEMB (GE Money Bank) in particular?

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Well, folks, I am almost at the end of the debt road here and ready to start my way back up the credit ladder. I've paid or settled all of my accounts but one, which is a store charge owned by GEMB. I had two accounts with GEMB and one, for $900, was sold to Arrow. I paid Arrow in full for it last month. The other, from an electronics retailer, has a balance of $4,000 and I am paying it in full next week. For some reason, they are still showing as the account holder on my CR with all 3 bureaus... they never sold it off or gave it to a collection agency. They do not know I plan on paying them- I have not heard from them AT ALL. No letters, no nothing. (It could be they have tried to call but I changed my number a year ago.)

Which brings up the question- HOW do I pay them off and get the transaction to help my score? I settled a chargeoff with Washington Mutual last month, 50% on a $6,500 balance and fortunately my score only went down 9 points when the settlement posted and my balance hit zero. I think perhaps the negative effect from the settlement and the positive effect from removing so much from my debt load may have cancelled themselves out somewhat.

I would think they would be doing cartwheels over getting this account paid in full and would be willing to bend a little. My thoughts are something along the lines of calling, asking for a supervisor and explaining that "I want to do the right thing and pay this completely, but I am trying to avoid re-aging the account when I pay you, would you agree to delete for payment in full?"

Any and all input is welcome- help me out! Anyone have experience with GEMB (GE Money Bank) in particular?

Questions? When you paid off the accounts, did you get written confirmation of removal from your credit report? :confused: Are you aware that if you make any settlements leaving a $600 balance or more, this can be reported on a form 1099 to the IRS? xThudx You also live in a state in which any payment made on an outstanding account "restarts" the state of limitations. :ah:ah:ah: Regarding the payment you are about to make, make sure that you get a "PFD" in writing prior to making any payment. There are letters available on this forum for this purpose. Remember "re-aging" applies to an erroneous change in the "date of first delinquency" DOFD. I think you are referring to the "statue of limitations" SOL. Again, make sure that everything you do... do it in writing! xdeadhorsex

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Of course your credit score went down-

Paying a charge off or collection does not help your score, but you now have a more recent DOLA. This makes the scoring model look at the TL as a newer item. More recent negatives have a larger impact on your score.

From FICO:

The score evaluates whenever there is derogatory public record or collection agency reference on your credit bureau report. Studies reveal that consumers with previous late payments are much more likely to miss payments in the future. However, as these items age and fall off the credit bureau report, their impact on the score will gradually decrease. (Most derogatory public records and collection items stay on your report for no more than seven years; there are other items that could remain longer.)

There is no "quick fix" to improve the score if the derogatory public record or collection item on your credit bureau report is valid. Keep in mind that satisfying or paying off the collection item or derogatory public record will not remove this information from your credit bureau report. The fact that it occurred is still predictive of future repayment risk, so it will still be considered by the score.

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Thanks to the above two posters, but I do know all of these things. Perhaps a better wat to state my question is, what is the best way to approach them to pay for delete or take some other action so paying it off won't hurt my score? I have all the money to pay it in full, and that is what I want to do... and will do no matter what. It is my last account to pay off, I have the cash and I do not want any more settlements on my account. But if they know I have the cash and intend to pay they have no reason to bargain or agree to do anything to lessen the impact on my score.

So, they have not heard from me or been able to reach me for 18 months. Imagine me calling them, I owe $4040 and have $4040 in hand ready to pay it all back, but want to bargain to get a pay for delete, etc. If I tell them I have the $4040 and they are getting it, they have no reason to bargain. I could ask them about settling, payments, etc and then ask them if they could do something for me if I paid it all back, etc... then get the agreement for PFD then announce that I will be Fedexing them a certified check for the full amount the following day.

I have thought about something along the lines of, "I am calling because I want do the right thing and pay you back... but because of the credit scoring model I will be damaged if I pay you, whereas if I let the debt sit my score will not go down...can we work something out where I pay you your money and you either report it as a zero balance or delete the file?"

Anyone have a better approach? Now, to search for those PFD letters...

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Your bargaining position is going to factor into this big time. Just like any negotiation, you come out better if you are bargaining from a position of strength.

Things that strengthen your position:

1 If the SOL has run

2 If the account is still with the OC, and not a JDB

3 If you have cash to pay it all now

4 If you are willing to "walk away"

5 If the owner needs the cash (smaller businesses bargain more)

Things that weaken it

1 Pending suit

2 If the lender knows you are against the wall- buying a house, etc.

3 If you are unwilling to walk away

4 Request to make "payments" instead of PIF

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Well, going by your chart of strength/weakness...

Strength factors

-SOL has not run

-Account is with the OC

-I do have the cash

-Not willing to walk away, but maybe I could fake it for a week or so

-GEMB is huge, so I don't think they need the cash like a small business would

Weak factors

-No suit is pending (but they may file if I raise my head again, announce I have the cash but do not pay)

-I am not against the wall, but I REALLY want this to be over.

-I am unwilling to walk away, but as I said above I could fake it...

-The payments would be a lead-in to take their temperature, then try to bargain with PIF.

Not all that great of a bargaining position. My strongest assets are I have the cash and the OC still has the account.

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As an alternative, offer to settle with an NDA- that is, as a part of the agreement, they agree not to discuss any facts of the account OR the settlement. Then you dispute. If they can't discuss, the account will come off after the 30 days are up.

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