Posted on: 23rd Aug, 2010 12:42 pm
The value of my home has dropped a little more than my 2nd mortgage. I've read on this site how if you don't pay the 2nd mortgage the lender will most likely charge it off and it will be sent to collections. I can then settle with collections. (2nd mortage is about $50k)
If I choose to do this, how badly will this reduce my credit. (It's currently above 700).
If I choose to do this, how badly will this reduce my credit. (It's currently above 700).
Hi Nick,
A charge off will definitely have a negative affect on your credit report. Your credit scores might get reduced by 50-150 points depending upon the other negative items that you've in your credit report.
Feel free to ask if you've further queries.
Sussane
A charge off will definitely have a negative affect on your credit report. Your credit scores might get reduced by 50-150 points depending upon the other negative items that you've in your credit report.
Feel free to ask if you've further queries.
Sussane
Thanks Sussane,
My credit is good with no other negatives. Will the 50-150 point drop be just for the charge off. Will settling with the collection agency for less drop my credit further?
My credit is good with no other negatives. Will the 50-150 point drop be just for the charge off. Will settling with the collection agency for less drop my credit further?
Thanks Sussane,
I don't have any other negative items on my credit. Is the 50-150 credit score drop just for the charge-off or will settling with the collection agency for less reduce my credit further?
I don't have any other negative items on my credit. Is the 50-150 credit score drop just for the charge-off or will settling with the collection agency for less reduce my credit further?
A debt settlement may lead to a drop in credit score. However, when you're settling the debt with a collection agency you can ask them to remove the "charge off" notation from your credit report.