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gar79

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Best way to handle a Discover Card "Closed-Derogatory" sent to collections/charge off.
I've searched and read many posts similar to my question, but none that really answered my question.

I have a Discover account that was closed-derogatory/charge-off on 3/20/2012. Last date of activity was 8/8/2011. Balance due is $4,054. I called for information regarding the status or the account last week and was told the debt is being handled by a collection agency (I apologize, but I don't know which agency. My notes from the phone call are at the office.)

I am in a much better situation now financially than I was in 2011-2013, and am trying to clean up the derogatory marks on my report. This Discover account is the final blemish. I am planning to purchase a home in 5/2017. I live in NC and will be buying a home in NC. CreditKarma score is 713/704 currently.

Is the best thing I can do to pay the whole debt in full? Should I negotiate a smaller payoff? Obviously, my first goal is to meet the demands of Discover/Collection Agency, but my next goal is to 1) remove any kind of negative language on my credit report, and 1b) spend as little as possible to meet those requirements.

If I negotiate a smaller amount to pay to clear the account, can I realistically expect to the collections agency to clear off the derogatory language? And what is the best I can ask for in terms of removing the language - that is, if they won't completely remove the account from my report, is there a next best thing to ask for? and something after that?

Also- After I meet the financial demands of the collection agency, do I inquire with the collection agency or Discover on the language on my credit report?
Thanks for any/all your help.

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There is nothing you can do with Discover to clear up the negative comment on your report.   The best you can expect is to wait it out until 2018 when it clears from your report.  Has the collection agent been in contact with you whatsoever?   It is best that they don't get the chance to report the past due on the credit report.  Not all collection agents report.  This doesn't mean they can't sell the debt to someone else who won't.   You can make an offer or a ask them what amount they will settle for to make the debt go away.   If they know you can pay it all, thats what they will want.   Once you have an agreed upon amount and you are prepared to make the payment, ask them one more question:  If it is paid off before it is reported, you are pretty clear.  if it is already on your credit report, ask them how much extra it would take for them to "delete it from your record entirely"  Get the agreement in writing and pay it off as agreed if not sooner.    If they won't accept what is called a "pay to delete" at least you have your initial settlement amount to have it paid off.    The mortgage broker would really like to see the full amount paid off if it appears on your report.

Reply by
gar79

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Thanks, Faidro. To answer your follow ups:

No, the collection agency has not been in contact with me and I haven't with them. 

And when I look at my credit report I do not see anything from the collection agency regarding the debt. It's only reported by Discover at this time.

If I ask for the amount they will take to settle the debt, should I not ask for the "pay for deletion" right away? I'm supposed to wait till I agree upon a price for settlement, and then ask but only if they have reported? Is there a chance they could report the debt after I settle?

Much appreciated.

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