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New Question: Here Please Help


ccbailout
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Hello,

I am in the process of settling with Wells Fargo Card Services.

I was speaking with the Rep. on the phone and he offered a 75% settlement.

But then he informed me that the 25% difference would be reported on my Credit Report as a charge off.

I had not heard of this before, or read this anywhere. He admitted to not fully having all the information, so it could be wrong.

Can anyone help me with clearing this up?

Could they report a "settled", or "paid" for the amount agreed to and then report a "charge off" for the difference?

Thank you

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From what I've read as far as credit reporting agencies are concerned a settled for $XXX is just as bad as charge off for X%. Now I'm not totally sure on this, however logically anyone who saw your CR and saw a "settled" account would know that the difference was charged off as a business loss. I would however request that it be reported as settled not charged off, as that would imply the full amount was charged off.

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A chargeoff is worse than a settlement because a chargeoff has never been paid. Once it is in chargeoff status you can negotiate a settlement as well, but you are better off to settle before chargeoff; a chargeoff is harder on your credit than a settlement before chargeoff. However, if it is already charged off and you settle, that will improve your credit score because you cleaned up the balance owed.

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You do want to get the settlement offer in writing along with the stipulation that they won't sell the balance to a JDB and that the account will have a $0 balance.

Unfortunatly, the term "charge off" is one of those weasal words that mean different things to different people at different times. What you want to appear on your reports are words to the effect of "settled for less than the full amount" and the balance owed set to $0. This is probably as good as a settlement with the OC is going to get, unless you can talk them into a "pay for delete".

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