How to Pay Off a Credit Card on My Credit Report Without Paying the Full Amount
The use of credit cards can be both a necessity and a convenience. Car rentals and hotel reservations usually require a valid credit card. Shopping and dining out may not require a credit card, but some consumers prefer to use one instead of cash. Unfortunately, the use of credit cards can lead to the accumulation of debt. If you want to settle that debt, you're in luck. According to the Federal Trade Commission, paying someone to settle unpaid debt for you is unnecessary. You can obtain a lower payoff amount yourself by negotiating directly with the creditor.
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Instructions
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Read your most recent billing statement from the creditor and ascertain the total amount owed, including any late fees and accrued interest. Decide what amount you can pay towards the total bill. This amount will serve as your settlement offer.
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Call the creditor and ask to speak to a supervisor. First-line customer service reps usually do not have the authority to negotiate settlement offers. Clearly inform the supervisor that you are prepared to settle the account in full, not make a partial payment.
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Offer an initial dollar figure that is lower than the amount you're able to pay. If you can pay $800 of a $1,000 bill, offer $500. The supervisor may accept your offer, or present a counteroffer. You want to leave room to negotiate.
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Request written confirmation of the settlement agreement once you and the supervisor agree on an amount, which states that the payment will settle the debt in full. Failure to get it in writing means that the company could come after you for the balance once they receive your payment.
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Send the payment to the credit card company after you receive the agreement in writing. Payment should be in the form of a U.S. Postal money order or cashier's check, and sent via certified mail, return receipt requested. Avoid sending a personal check or giving debit card information out over the phone. It gives the company access to your bank account and they may withdraw the wrong amount.
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Order a copy of your credit report one month after the payment is made. The Fair and Accurate Credit Transaction Act (FACTA) gives consumers the right to order one free credit report each year from the three major bureaus: Experian, Equifax and TransUnion. You can order the report online at the bureau's website, by mail, phone or at the website created under FACTA for this purpose.
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Check the report and ensure that the creditor has correctly reported the status of the account. It should read as paid in full with a zero balance. If there's an error, file a dispute with the credit bureau. The Fair Credit Reporting Act (FCRA) gives consumers the right to dispute inaccuracies on a credit report. You can file a dispute by phone, mail or at the bureau's website, and the bureau has up to 30 days to make the correction.
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Tips & Warnings
Keep in mind that creditors are not required to settle credit card debt. They do so at their discretion and thus, they have the right to refuse any and all offers.
Never order a credit report from a shared or public computer. You could become a victim of identity theft if you do.
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