Will negotiating credit card debt hurt my credit score?

Question by Cutman: Will negotiating credit card debt hurt my credit score?
I’ve been unemployed for a couple months, and the credit card payments are starting to hurt.

If I negotiate with the credit card company to reduced my debt or monthly payment, will this somehow hurt my credit score.

I plan on refinancing my mortgage when I get another job, and I don’t want my score to be hurt.

Best answer:

Answer by Thomas
If your debt is in any way written off it will cause significant damage to your credit score. It you renegotiate a different form of settlement – such as extending the term, it may or may not reflect because some companies consider such accounts as still current while others will report them as past due.

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6 Responses to Will negotiating credit card debt hurt my credit score?

  1. lathom01 says:

    The credit card company may POSSIBLY be persuaded into reducing the interest rate which, in turn, will reduce the monthly payment, but they arent going to reduce the amount that you truly owe. If you bought a $ 600 stereo, there is no reason why you should be allowed to negotiate less than that. If you defaulted on your credit card payments and the debts were sold to a collection agency, you can negotiate with THEM for a smaller amount, but the late payments, the referral to a collection agency, and the payment of less than what’s owed will ALL hurt your credit significantly. About all you can do without damaging your credit would be to plead with the credit card companies to lower your interest rates. I kind of doubt they will though since they only care about their own financial well-being. If, by some miracle, they DO decide to reduce your interest rates, they may also require you to surrender the credit card. The account, naturally, stays opened until it is paid-off, but you wont be able to further charge anything onto it. If they’re going to agree to take less money, they may require a good faith gesture on your part that you wont take advantage of it and charge new things on your lower interest rate card. Thus, they may cancel your charge abilities.

  2. saved_astronaut says:

    all u can do is talk 2 the creditors & share what U said here. if yer hurting on mortgage then u can find some 1 2 buy the home & take over pmts. a neighbor of mine did this & he was able 2 move away

  3. Andy R says:

    In a word, Yes!

    The T.V. adds for debt negotiation, reduction , etc fail to explain the full ramifications of these actions. You agreed to the terms of a revolving loan and you have to pay it back. Keep in mind that few of the Credit Counselors out there are really helpful “non-profit” entities and ALL of them are despised by creditors.

    Put it like this (common sense that is)… I owe you 10k and call up one day and ask if I can pay only 5k of that. What’s your motivation for doing so? You have me dead to rights with the contract I signed and you figure I will work again some day at which point you’ll put your skip tracer on my trail and garnish my future wages.

    If you haven’t yet been late, consider switching the balance to another card you already own that has introductory rates for coming back to them.

    I have struggled with work too but it might be time for you to take a job under your abilities for the cash flow and ability to keep up with these minimum payments.

  4. bdancer222 says:

    Some credit card companies will work with you and lower interest and/or defer payments on a temporary basis. Some won’t. This probably won’t hurt your credit.

    However, if you negotiate a settlement for less, the account will be reported as charge off/settled — a negative. You would also likely get a 1099 for the forgiven portion which would have to be included on your income tax return.

  5. Reena says:

    Unfortunately… Yes.

    If you call them up and negotiate any kind of “break” that allows you to pay less for a couple of months then this will be reflected on your credit report.

    Since you are planning to refinance your mortgage and need stellar credit to do so… it would be better to tough it out and keep the normal minimum payment schedule going.

  6. grandparay00 says:


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