Settling collections for pennies on the dollar

Posted On: September 2011

THE KREDIT KORNER WITH THE KREDITGURU, GARY NOVEL

Editor: Tiffany Brewington

Q: I heard that you can settle collection items on your credit report for pennies on the dollar? Is that true? How do I do it?

A: If you have a large debt, you can always work out what is called a "settlement" with the company you owe the money to. Simply contact the company, admit you owe the debt, and tell them that you have a little money to pay off outstanding bills. Ask them, "What's the best offer you can give me if I can get you the money within 10 days?"

For example, if you owe $1000, they may say they will accept $700 to consider this collections debt "settled in full." Also, you can always "counter" the offer by telling them you have $600 in your hand right now, and will they accept that?

NEGOTIATE, NEGOTIATE.....it can't hurt!

Settling a collections account for pennies on the dollar has the same affect on your Credit Score, and will appear as a "paid in full" account.

For all your credit-related questions, contact Gary Novel, President of Kreditguru, Inc at 630/624-9557 or kreditguru@aol.com

Posted On: September 2011

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