settle credit card debt in collection?

What happens to your credit if you settle credit card debt in collection?

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Credit card debt gets worse when they are charged off and transferred to collections!

There are a few things that you should keep in mind when you plan to settle credit card debts, that are currently handled by a collection agency!

Remember, your credit score has already been affected when your creditor wrote the debt off as delinquent! Your score can only get worse, if you delay sorting it out with the collection agency.

So, once a credit card debt goes to collections, it’s now the agency’s duty to report to the credit bureaus about your delinquency. And, your credit score is typically based on what’s getting displayed on the credit reports, issued by the bureaus.

The collection agency will decide whether or not to report your current debt status to the credit bureaus. Till your status gets updated with a credit bureau, you have the game on your side. In fact, you can even make sure that this collection account never gets reported!

What you do is, you enter into a settlement offer with the collection agency.

Is credit card debt settlement easy? How do you do it?

If you are in a pretty messed up situation, where your credit score has fallen to sea level, your expenses have surpassed your income, your debt amounts are in no place to be paid off, then we believe you should go for credit card debt settlement!

Moreover, if your debts are passed onto collections, then a settlement is the best option!
Because, it is far better to settle and get rid of the collection account once and for all, than dragging it for long with balance transfer or other ways to pay off credit card debt!

The credit card settlement process is pretty easy if you work with a settlement company. You might get to read and hear in many places that these debt settlement companies are not worth it, as many are frauds and some don’t have a smart reputation.

But, trust is God! You got to have faith and patience!
The settlement companies take time in handling debts, but they are really helpful, if you can select a settlement company that has a good history with settling credit card debt. Experience speaks a lot while trying to settle debts, especially for the accounts handled by debt collectors.
You can definitely do it yourself – the credit card debt settlement, but collectors are no easy game!

They will try to harass you and pull back the owed amounts by all the means possible. At times it doesn’t go unheard that these collectors use manpower and gunpowder to force the debtors to pay their debts!

How debt settlement affects your credit

See man, to tell you the truth, any form of paying off debt that doesn’t involve the normal schedule of payment will hurt your score, do whatever you may want!

But we can truly try the best, to cause as little harm as possible to the credit score, while doing settlement.

The credit card settlement process is not over, even after the debts get settled. The next step is probably the most vital one.

The collectors should report the account as ‘paid in full’ or anything like that, to the credit bureaus. If the account gets displayed as ‘settled’ or ‘discharged on forgiveness’, and so on, then your credit score will fall heavily. This is a negative mark on your credit report.

I believe the trick is to influence the collectors to display the account as rightfully paid, or there’s no way to help your credit score increase.And, playing this trick is no simple water!!

So, take help of lawyers and settlement companies to accomplish your debt goals!
Still when you are doing a lump sum settlement for credit cards, you actually should not worry about credit scores much. A lump sum settlement is never a favourable condition for creditors. They will always try to avenge it, by smudging the credit reports, as that’s something in their court.

A credit card lump sum settlement can never be good for credit score or your credit history.
Usually we always ask debtors to try to pay off credit card bills on time, to avoid later complications. But, what to do!! Things get so messy at times, that a credit card lump sum settlement is the only viable option for us.

Finally comes the question, can paying off or settling debts in collections help credit?

A good credit card debt settlement done by professionals in the best procedure, can help your credit score to increase!

That’s because it has two aspects. One that I have already discussed above, is to get the collector or creditor send a good status to the credit bureau, once the settlement is over.
The second is, upon you, where you will become a responsible credit user in the future. Now that the debts are settled, and you are freed of the debt burden, you should focus on building your credit score once again. This might sound impractical and hypothetical, but it’s true!

So, next time onwards, take this precious suggestion! Pay debts on time.
If you can’t pay it off in full, then settle it, no matter in what position the debt is! It doesn’t really matter whether it’s with the creditor or a collector, and so! Just get rid of it, before it’s too late.

One way, your scores are gonna drop because you couldn’t pay in time! Hence, don’t waste anymore time!
First deal with the debt, and then you can plan to mend the broken credit score, by learning from your past mistakes.


9 Ways to achieve financial independence sooner

Posted by: consolidatecreditcard_admin on

Do you feel if you could go back in your 30s, then you would manage your finance differently? Do you wish to go back in the past to get more time to prepare for retirement? You’re not alone. There are many people who are struggling in their retirement. Most of them are drowning in debt burden even after retirement. Some people have to stretch their work life to survive. They often regret the financial mistakes that they did.

Some people have achieved financial independence at an early age. They have proved that achieving financial independence sooner is possible.

How can people achieve financial independence?

Saving more is the key to achieve financial independence at an early page. Apart from it, you have to plan your finances carefully.

Here you go:

  1. The more you save, the sooner you can announce retirement

    The best way to secure your financial future is by saving money. You need to decide how much money to set aside to pay yourself every month. The amount can depend according to your income; no matter how much your monthly income is. Try to make a habit to save as much as possible of your gross monthly income. It will help to make some positive changes in your financial graph. Save more in a case of higher monthly income.

  2. Enroll in your 401(k) account

    According to the most financial experts, you must enroll in a 401(K) account to secure your retirement.

    If you’ve still not enrolled in your company’s retirement account plan 401(k), then you’re lagging backward. The 401(k) account is an unparalleled savings option. It will help you put in your pre-tax dollars and qualify for an employer match that could help you literally to save free money. Keep updated on the third-party investment advisory services to avoid confusion on this subject.

  3. Start investing money

    Be always confident when it comes to investing money. Invest money in the safe investment vehicles but make sure you have enough funds available at your disposal to fight any financial emergency.

  4. Questions that you should ask before investing

    Before choosing an investment opportunity, it is important for an investor to ask a number of questions like:

    • In what way the various investments match your objectives and which is the best one for you?
    • How easy will it be for you to sell off the investment?
    • How much will it cost you to buy, hold, and sell the item you are going to invest in?
    • What are the returns that you can expect on the amount you had invested and when can you get back the money?
    • From where can you get more information about investments?

  5. Invest in mutual funds

    Stick to investing in low-cost and no-load mutual funds that can help you gain huge returns on minimum investment. Clever investment can often be beneficial for those who are looking for ways to build wealth.

  6. Be the early bird

    You need to start early to get better investment results. Remember, the type of financial instrument you’re choosing and the age you’re starting off are very important.

    For instance, a person who starts contributing $100 a month when he is 22 will earn more than a person who wants to be 32 to set aside $100 per month. If their money grows at a rate of 8%, the first person will have $234,600 and the second person will get $177,400 (If they both retire at the age of 64). This proves the importance of investment at an early age to build wealth and address your financial obligations. So, make the decision wisely.

  7. Live a frugal life

    Leading a frugal life is the ultimate secret when it comes to achieve financial independence. You should try to save as much as possible on daily basis. Living a frugal life can help you to do that.

    Living a frugal life doesn’t mean you have to deprive yourself. You just need to prioritize saving money. Spend money on what you need instead of on wants.

  8. Don’t welcome debt

    If you are in huge debt, you have to pay them off as early as possible. The sooner you get out of higher interest rate debt, the quicker you can start saving money for your future. You should get financial advice to get out of debt faster. After that, you shouldn’t accumulate further debts in the future. To do so, you have to build an emergency fund that works as a debt shield.

  9. Increase your earning

    Traditional income is not enough when it comes to achieve financial independence at an early age. You should find out other income sources to increase cash flow.

    For example,

    • You can give rent to a portion of your home.
    • You can start blogging.
    • You can do part-time jobs.

Lastly, most of the Americans forget to plan their retirement as they’re far busier with planning their vacations. As a financially responsible citizen, it is your duty to plan your retirement so that your finances do not go out of control when you have no mainstream income. If you truly want to enjoy your life, then secure your financial future fast. This is the ultimate key to achieve financial independence and early retirement.

Those who don’t want to retire early also need to secure their financial future. Otherwise, you may have to work till their death or live a poor life in their golden age.