One of our readers, Jaclyn, had this question for us:

If I removed an authorized user from an account, how long does it normally take to show up on the credit report as removed?

Jaclyn,

If you removed an authorized user from your account it will eventually show up on the other person’s credit report. However, how long it takes depends on the credit card company. If the credit card company regularly reports your account activity to the credit bureaus then the removal should be reflected the month after you made the change.

If the credit card company does not report regularly to all three credit bureaus, then it could take 3-6 months for the change to show up.

The easiest way to tell is to download a copy of all three of your (or their) credit reports. You can start that process at Annual Credit Report.com

You can either wait a month to see if the changes have shown up, or you can check it now to see how often that particular card reports to the credit bureaus.

Basically the change will show up whenever the card reports to the credit bureaus next – but there is no industry standard, so it just depends on your credit card company.

Another reader, Tyler, had this question:

I was wondering if i can offer a lesser amount on my credit cards than what i owe. I owe about $22000, and i have the money to pay them off but can i offer like .40 or .50 on the dollar without hurting my credit. And i am current on all my payments.. Thanks

Tyler,

You can certainly offer a lesser amount and attempt to settle your debt. However, most companies do not like to tackle debt settlement unless you are past due.

If it were me, I would try making that offer in writing before you go past due, and if they reject it, you can consider going about a week past due and then making the offer to the collection department.

Just be aware that if you do go past due in order to settle your debt it will reflect as a late payment on your credit report.

As far as how a settlement will reflect on your credit report, it will lower your score a little. How much depends on the rest of your credit profile, so there is no way for me to tell you how much of an impact it will have.

This is one of those situations where you will need to weigh the financial gain from a debt settlement against possible damage to your credit rating. If you do choose to settle your debt for a lesser amount, then just make sure that from that point on you never miss payments, have late payments, or go over your limits. Also, once your debt is settled, do not charge more than 20% of your total available credit on any card.

If you follow those rules, then whatever impact the settlement had on your credit score, you will be able to recover from it given time.

If you are planning on taking out any loans in the next year or so, make sure you check your credit score. It might be wiser to wait to settle your debt until you have taken on the new loan – just in case your score drops.

Also, for some excellent examples of debt settlement negotiation letters I highly recommend The Guerrilla Guide To Credit Repair. It will walk you through the process and make everything much easier if you use the templates in it.

Thanks for your question!

Our third question came from Sarah, who has lost her job and needs some help negotiating with her credit card company.

i have lost my job, have not been able to make payments on my Financial bank credit card. this card i obtained while in college, and had no interest rates, now that i am unemployed and unable to make payments for now 3 months, the late fees, interest has gone up to 26.75 % and i want it sent to collections….yes i understand the long term effect with my credit rating but i am desperate…they will not budge to help lower rates

Hi Sarah,

Since you are three months behind you have definitely been sent to the credit card company’s collection department.

Now, running this far behind on payments, you run the risk of having your debt sold to a separate collection agency. A collection agency might be more willing to work with you as far as negotiating your debt, but not all of them will.

So, my advice is to get pack on the phone one more time with your credit card company. Ask them to remove all of the late and over the limit fees on the card, and ask them to set you up on a payment plan.

You will actually have to make a payment with them that day, but it could be as little as $20 or $30 – just have something ready when you call them.

I understand that you are unemployed, so if you need to get a loan from family or friends to do this, it will really help make your life easier in years to come. If you can just get set up on a payment plan it will protect your credit rating, and you will have a much easier time recovering from this period in your life.

Now, I understand that credit card companies can be very, very difficult to deal with when it comes to negotiations or having fees removed. I am going to reference several articles at the bottom of this one that should help you begin negotiations with them.

If you do allow the account to be sold to a collection company, be aware that they are going to tack on their own fees. At that point (once your debt has been sold) you can look for that total balance owed to go up no matter what, and you are still going to have to deal with either a lump-sum debt settlement (which is hard when you’re unemployed) or a payment arrangement with the collection companies.

So, again, the best advice is to do whatever you can to deal with your credit card company and stop the collections process. Please trust me when I say that the alternative (letting your account go into the cycle of collection companies) is not only unpleasant, but it will have long term repercussions on your credit rating.

Give your credit card company a call, and speak with a collections manager. Explain to them that you are unemployed, but that you really, really want to work something out with them to get your account paid off. Ask them how they can help you, and just be as nice as possible.

It’s a tough situation, and I wish you all the best as you work to get it resolved. Please feel free to come back and ask questions if you need help in any of the later stages or negotiations.

Thanks!
Mr. CC

Have a question for us? Leave a comment below!

Grab our Free RSS Feed and Keep Reading:

• Tough Negotiations With Credit Card Companies
• Negotiating With Your Creditors When You’re Past Due
• What To Do When Your Credit Card Company Won’t Cooperate

This entry was posted on Friday, January 9th, 2009 at 15:16 and is filed under Debt Reduction FAQ, Reader's FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.