Removing a Settlement?

[zonearc]

Folks,

I'm new here, but I did take the time to read through the stickies in the beginner's forum. I didn't see anything regarding existing settlements, but I'm hoping there are still some things that could be done.

The short story is it was a collection's debt through an apartment complex I lived at. By the time I was aware of everything happening, I had a court date set a month later after I received my paperwork. I went to the courtroom, and was offered a settlement in the hallway while I waited. Of course, this seems to be the worst thing I could have done based on what I'm reading, but I was not literate on what I could do to make this go better in my favor. So, since then (about a year ago), the debt has been settled. On one of my credit reports (Equifax), it shows as:

"
SETTLEMENT ACCEPTED ON THIS ACCOUNT
Paid"

On Transunion and Experian, it shows as "Closed. Account in dispute-reported by subscriber".


What I'm hoping is to find a way to get this pulled from my credit report. If I can't do that, I'll at least get a letter from the CA so I can get Experian and Transunion updated. This is one of the only items on my credit report that is blatantly negative and I really want to get it fixed since my credit score is incredibly low (545).

Thank you in advance!

[Lian]

When you "settle" a debt, that means it is legally satisfied in full. How much you paid to settle the debt is between you and the creditor/debt collector.

Settlement is a generic term. When a debt is settled, the debt collector must update their collection reporting to "closed," and the amount of debt under collection to $0. The OC, if they are reporting a balance, must update that balance to $0, and update the account status to "paid." A current account status of paid does not record or reflect the amount of any settlement. Paid means legally satisfied. One word, one status.

When you settle for less than the full amount, the creditor has the option to additionally provide a "special comment" to the CRA, which is stored in a separate field code 19, simply stating that the debt was settled for less than the full amount. No amounts are specified. And of course, the prior derogs underlying the debt are stored in other field codes, such as payment rating (its status prior to its current paid status), and your payment history profile. So one viewing your CR can see that payment was not for the full amount, and the status of the debt prior to settlement. Those all are blocked from CR inclusion after the expiration of their CR exclusion date under FCRA 605(a).

You can ask the OC for earlier deletion of this special comment from your CR via a good-will letter.

From a FICO perspective, it does not matter. FICO does not score either the payment or non-payment of debt, or if any settlement for less than the full amount was involved. However, it is definitely a black mark when viewed upon a manual review of your CR, and would be worth the effort to get removed.