Credit card deal affect my rating?

normski7

About a year ago I had got myself into trouble with credit cards.

Over the past 6 months I have got on top of it and I have made some deals with my credit card companies.

I checked my credit score last month and today, they were 880 (good rating) and 864(fair rating) respectively.

Anyway, one of my credit card companies have offered to accept 40% of my current balance to clear my credit card. That's £1013 to clear £2533.

Will making this deal affect my credit rating?

ironlady2022

Yes and for a long time as you spent that money and agreeing to terms and conditions at the same time (ie interest payments). It will seem rosy now but if you need credit in the near future you will be refused.

CLAPTON

credit scores are rubbish; what do your reports actually say? do they show missed payments or arrangement to pay or what?

you need to ask them to report the settlement as settled in full rather than partial settlement
if it shows partial settlement then that will trash your credit record as it shows you didn't pay your debt
and of course get everything in writing.

normski7

I've looked through my full reports and there is no reports of missed payments or anything that looks bad.

The credit card company said that it will show that the account has been settled in full and that the records will also show the settlement that it was a settlement. They said the reason for this is purely for records.

normski7

Mayling03 can you define the near future? I'm actually working abroad right now, and I'm going to be here for at least two years. Do you think I will be able to build up my credit in that time? Assuming I don't miss any payments on other cards and/or pay them off in full.

Degenerate

I can't fathom how you "got into trouble" and "made deals" without any of it showing on your credit report.

CC providers usually won't negotiate until you have fallen behind with payments.

I would expect that your credit file is already trashed and you have nothing to lose from accepting the deal.

thenudeone

normski7 wrote: »

The credit card company said that it will show that the account has been settled in full

Although the company may have told you this, I would be very surprised if it was true. The agreements they have with credit reference agencies almost certainly obliges them to provide true information including details of defaults and individual arrangements.

I would ask for the confirmation in writing.

It may be a good offer even if it does trash your credit history, though.

izools

The most important thing to know first off is has the account already defaulted?

If it's already fallen into default, you've been served with a default notice, and are clearing that via a debt collection agency, the offer may be worth considering.

An outstanding default is worse than a partially satisfied default.

If however the account hasn't yet defaulted, don't whatever you do short settle unless you don't mind your credit file being trashed; as they will have to default it to show you've short settled.

normski7

Ok, so about 7 months ago I stopped paying all my cards (4 off them). Obviously they started calling me and I missed payments on most of them for around 4 months each. Since then I have been able to set up lower d/ds. About 2 months ago I paid 75% of one of my cards off (settlement deal). I have been checking my credit file via credit expert regularly since all of this has happened and my rating has not been affected and there is no record of any of the deals or even missed monthly payments.

Rabster8

Try getting a second opinion on your credit rating, as it seems strange that Credit Expert do not show these late payments and defaults.

PNPSUKNET

very strange indeed. I cant see them putting a fully satisfied marker on either. More like a partial settlement flag