PFD Question

[ThePawn]

Hello All. This is my 1st post of many I am sure. I am really excited to join such a great and helpful forum. I hope to one day be able to help others here.

I have a Compass MC that I have been late on in the past on more than one occasion. It is a month behind now because I have been lazy in deciding what to do. I almost always pay this account online and the account always shows up as closed when I do this. That is until now. I only owe $6 on it now due to paying it down and when I log in now it shows that I nearly have $2,500 of available credit.

I do not want this account to fall into collections. Payment is due tomorrow for the payoff balance. Do I need to call them to make sure that they don't turn it over to a CA? If the account is no longer closed, do I keep it open and use it towards the credit rebuilding process or do I send them a PFD letter and start over? I planned on sending them in excess of what is due to try to grease the wheels for a PFD to be accepted. Thanks again for any insight that any in this wonderful community can provide.

Jason

[Lian]

If the account is closed, you do not have an available line of credit to use, so it is still apparently open. The status is thus kinda confusing.

Regardless, any account that is delinquent can be assigned to a debt collector at any time of choosing by the OC. Alternately, or additionally, the creditor can charge-off the debt, so there is a chance of either one, the other, or both occurring on a delinquent account. You have no control over the OC taking either of these actions, so delaying in payment of a delinquent debt has peril of escalating.

if you send a PFD offer, you are delaying payment until you first receive agreement from the OC that, upon your payment, they will additionally delete reporting of delinquencies on the account. They don't have to accept, or even respond, to a PFD offer, so you remain in limbo as to their further action. It is a gamble upon securing CR deletion of prior reporting before paying that may backfire, particularly if the debt is still within SOL, which leaves the threat of legal action as an option for the OC.

If you close the account, it wont delete anything other than removal of your CL on the account, thus removing it from your % util calculation once the balance is paid. Closing will thus probably have a negative FICO impact after the debt is paid. I don't see any advantage to doing so.