I saw on tv that credit card companies are cutting a lot of deals right now – writing off half the balance. If you make a deal with your credit card company, will that adversely affect your credit rating? I only have $5K in debt, so there’s no point in ruining my credit to save $2K. Tks.
it all depends on how they report your transaction to the credit reporting agency. if they tell you that they will report the payment as “received in good” or “paid in full on time”, it should not have a negative impact on your score. however, if it is considered a “settlement” or “reduced principal paid,” and reported as such to the credit agencies, it WILL have a negative impact on your score. i have not heard of companies cutting deals on the balance of debt that does not hurt your score. they are more likely to waive late fees or reduce your APR. bottom line is to learn what they report to the credit agency before taking any action.
It is also taxable…
Be aware that things like personal bankruptcies and out-of-bankruptcy settlements with creditors definitely affect your employability in the finance industry. If you want a Wall Street career, definitely don’t try to game your creditors, it’s a serious career risk.
Thanks all - I’m not touching it with a ten foot pole.
Do you have a job? If you can cover your minimum payment, why on earth would they discount your balance now?