Negotiating Reduced Payoff Can Hurt Credit Score

Did you know negotiating a reduced payment payoff with a lender negatively affects your credit score?

What you’re doing is actually settling the debt for less than you owe. As such, the lender will probably report the debt as “settled” rather than paid. Often it’s more important to get the debt off your back than to maintain a pristine credit score, but you should just be aware you might incur a ding. But don’t let that stop you from getting debt-free if that’s what it takes!

Negotiating reduced payments can hurt credit scores [Ask Max] (Photo: Colin Tobin)