Debt question from a newbie

Tommo121

Hi I am being offered a settlement figure for a debt I currently have. If I settle this how does this effect my credit history ?
It's about 2/3 the value of the original debt. Is this worth clearing if I can? Will it still impact adversely on my credit history as the debt hasn't been fully paid? Any advice very welcome. If this is in the wrong section then apologies - this is my first visit. Just a bit of context I have had the debt for 4 years now and have not missed a payment on my pay schedule.

sourcrates

Tommo121 wrote: »

Hi I am being offered a settlement figure for a debt I currently have. If I settle this how does this effect my credit history ?
It's about 2/3 the value of the original debt. Is this worth clearing if I can? Will it still impact adversely on my credit history as the debt hasn't been fully paid? Any advice very welcome. If this is in the wrong section then apologies - this is my first visit. Just a bit of context I have had the debt for 4 years now and have not missed a payment on my pay schedule.

Hi Tommo,


Is the debt with a debt collection agency, or the original creditor ?
what is the debt, card, loan ?? and how old is the account ?

Tommo121

Hi there thanks for you reply. Debt originally with a bank dating back to 2009. Now being managed by a debt agency. Having been a monthly sum
Since 2009. They are now mentioning a settlement etc. is this advantageous ? Should it be ignored or is it worth real consideration.
If I do pay it off how does it effect my CH.
ta

National_Debtline

Hello there,

Most creditors will register a settlement of this type with a 'P' flag on your credit file. This shows that it has been recorded as a 'partial' settlement. The balance should show as zero. Some folks suggest trying to seek assurance from the creditor that the debt will be marked as a 'full & final' settlement. It seems that, as time goes by, these are becoming more and more difficult to obtain.

We understand that either way has a similar effect on your credit file although it has been brought to our attention that a 'P' flag could trigger a manual review if you were to apply for credit in the future - and depending on your prospective lender's underwriting policies may impact whether or not they will lend to you.

Best wishes,

David @ National Debtline.

sourcrates

Tommo121 wrote: »

Hi there thanks for you reply. Debt originally with a bank dating back to 2009. Now being managed by a debt agency. Having been a monthly sum
Since 2009. They are now mentioning a settlement etc. is this advantageous ? Should it be ignored or is it worth real consideration.
If I do pay it off how does it effect my CH.
ta

So it was an overdraught was it ?
when you say debt agency, can you say which one ?
You have been paying x amount a month, now they want more, is that correct ?
DCA`s routinely offer settlement figures, you see the way it works is like this, the bank writes off the debt, the DCA buys it for a few quid in the pound, then pursues you for the full balance.
I would write to them, and ask for a complete breakdown of charges etc, and statement of account.
They should not be charging you any interest or making any other charge either.

Tommo121

Thanks very much.

x_raphael_xx

Wow! I didn't know this!
When I was paying off my debts I would ask for !!!!!! and if I could afford it, paid it off.
I assumed paying off the debt and closing the account would be seen as a good thing. Didn't realise it could be seen as not paying the full debt!