Credit Card Negotiations and Credit
More and more people fall behind on their credit card payments each day, bringing stress and concern over your credit standing. Defaulting on credit card payments can damage your credit standing and effect the potential to borrow again in the future.
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Credit card negotiations will allow you to continue making payments, which will be less damaging than defaulting on your payments altogether. However, there are some important things to know when it comes to credit card negotiations and your credit.
Credit Card Negotiations
Is your account delinquent? If your account isn’t considered delinquent, the credit company is not likely to allow a credit negotiation.
The good thing about a delinquent account is that you are likely to obtain a negotiated repayment plan.
The downside to having a delinquent account is that there is already some damage done to your credit. By the time you enter into a credit card negotiation, your credit has already been damaged to an extent. Of course, the longer your account is delinquent, the more your credit will be damaged.
If you complete the repayment agreement as negotiated, your account will be considered “current” and your delinquency status will drop off your credit reports. Making consistent and timely payments, as outlined in the agreement, will reflect a timely payment status on your credit report.
By repaying the debt and obtaining a current status on your account, your credit will begin to repair much faster than if you did not repay the debts. Many times, obtaining a “paid in full” letter after you complete the repayment agreement will help you obtain credit in the future.
Credit Card Settlements
A credit card settlement is different than a negotiation in that the lender agrees to take less than the amount owed to satisfy the debt.
Again, you must ask yourself: Is my account delinquent? If the answer is “No”, you are not likely to obtain a settlement.
If your account is considered delinquent you may be able to request a debt settlement arrangement. However, the credit company must approve the debt settlement before you can be released from liability of paying the full amount owed.
It is important to find out how the settlement will be reported to the credit bureaus before accepting a settlement agreement. If the credit company “writes off” the debts, your credit may be affected the same way as if you had your debts discharged. If the credit company “forgives” the debts, your credit score will reflect a “partial payment” status. A “Partial payment” status will reflect negatively on your credit standing and appear worse than a debt discharge.
Need help with the process? Let one our our expert attorneys help you negotiate or settle your debts fast and easy! We know how to deal with creditors and we can do all of the hard work for you! You have enough to worry about, which is why our mission is to help you find debt relief that gives you peace of mind and financial stability!