What triggers an alert about a debt settlement?
Typically this occurs when a creditor reports that you settled the debt instead of paying the full amount. Although settling an account is considered negative, it won't hurt your credit score as much as not paying at all.
When you settle, the credit bureau will not immediately remove the account from your credit report. If you were late on payments, the account will remain on your credit report for seven years from the original delinquency date. If there were no late payments in the account history at the time of settlement, the account will remain on your report for seven years from the settlement date.
Is there anything I should do?
If you recognize the inquiry, you can mark the alert as resolved in Aura.
If you don’t recognize the inquiry, review the following questions as they may help you recognize the alert:
- Do you recognize the name of the creditor? In some cases the name shown on the credit report is abbreviated.
- Is an account shared with a family member? An account may be part of your credit report if you are an authorized user or cosigner.
- If you still don’t recognize the alert, we recommend contacting the creditor and letting them know about this credit alert. They should be able to help you identify it. The creditor phone number should be included in the details of the alert you received.