Account Settlement and Credit Rating

gumshoesheffield

Can someone advise me? I have managed to get a credit card to agree to a 60% settlement of my outstanding bill. I asked them if this amount would "settle the account to their satisfaction". They ahve replied with the following wording:


"...pleased to confirm we will accept £xxx as full and final settlement...Oncereceived and cleared on our system, we will report to the relevant CreditReference Bureaux to advise them that this account has a zero balance and ispartially settled with us."


I am a bit worrined about the phrase "partially settled with us". Does this mean they could come back at some later time and ask for more? Does it mean it won't help to restore my credit rating?

Any thoughts appreciated. Thanks.

Buzby

No - you are making an offer of payment that is in full and final settlement. They will not come back for more - however, they are saying the credit file will only reflect that you partially cleared the account, so the default will remain on display.

Indeed even if you didn't pay them a penny and let them swivel, the default will still remain. You could always play them at their own game, replying that you note their position, but regrettably if your credit file will still show a default, there is no benefit in you clearing the debt.

Should they reconsider, you will arrange for funds to be credited by return.

(If you don't ask, you don't get!).

TheGenerus1

It just means that the account has now been settled and closed but a little marker has been made under the settlement field saying that you did not pay back fully what you owed but an agreement was made with you to pay a partial amount of the what you did owe.

This should be the end of the matter concerning that account, but I believe that this will not look favorably by lenders as they can see that it got to a stage where you could not repay what was owed and they had to write 40% of your debt off.

Not a good sign to potential lender and maybe cause for concern to other financial institutes that you hold credit account with via monthly credit files updates they receive.

Maybe possible interest hike on other financial products you have due to risk of the same thing happening to them.

gumshoesheffield

Thanks to Buzby and TheGenerus1 for swift and detailed replies. That is what I thought. I will write back to them and try to negotiate further.