Expert: David - 3/5/2009

Question
My wife has a dept store credit card with $2,800 balance. She asked about a payoff settlement.  They were willing to reduce balance by 20% but indicated that this would be reported to credit history.  Will this have a significant affect on her credit score / history.  Somewhat recent credit score for her was in low 700's.

Answer
Yes it will be significant for about a year and it will gradually lessen.  She'll probably drop 60 points or more.  If you do this you should try to have it removed from the credit report after the settlement.  You can hire someone or do it yourself.  If you do it yourself you should do extensive research first to make sure you do it right.  Don't try it on-line through the credit reporting agencies web-site.  That is the least effective way.

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David Mcarthur
219-718-8566