Debt settlement can affect a person’s credit score differently, depending on each individual and their situation, according to Golden Financial Services. This is a hard question to answer in one sentence, so please read the entire page.
750 Credit Score
If you have a 750 credit score and you have never been late on any of your bills, then you will see a decline in your credit score over the first six months of a settlement program, if you were to join.
What is a hardship?
A hardship could include:
- Unmanageable debt (You will never get the debt paid off on your own)
- Reduced income or Job Loss
- Medical Problems
- Family Issues that lead to extra expenses (Example: Taking care of your mom financially)
- School Expenses
- Poor Money Management
Do you have a hardship?
Is your credit score really your main concern right now?
Keep in mind; you must have a hardship situation, in order to even qualify for this type of program.
If you have a hardship situation that has occurred in your life, then there is a good chance that you are:
- On the urge of falling behind on your accounts.
- Already behind on your accounts.
- Only paying minimum payments and barely surviving.
- Have high balances on your accounts, that you will never be able to pay off on your own.
In any of these events, your credit score has probably already been negatively affected, where your credit is not your main concern at this time. Paying off your debt is probably your priority at this time. Right?
A settlement program is designed to help you with paying off your debt fast. Once you are debt free, you will then be in a position to rebuild your credit score. Many consumers prefer settlement over consolidation, because of how fast they can become debt free, and start fresh.
Learn more about how to qualify for a debt settlement service here.
What about my credit after graduating on the program?
Once you graduate on the program, within 18 months, you could have your credit score right back up in the 700 range, and have no debt! It is easier to recover from debt settlement, than bankruptcy.
When you do finally become debt free, it is important for you to follow the rules that we teach you while on the program, that will help you with rebuilding your credit score.
Why could a debt settlement program negatively affect your credit score?
The reason why is because your accounts will eventually go to a collection agency, before our negotiators can settle with your creditors. Failing to pay your bills on time each month can negatively affect your credit score.
If a person remains current on their accounts, settlement services will not work. Creditors will obviously not work with us if you are paying them the full payment each month.
What else can negatively affect your credit score?
- Having high balances on your credit cards (utilizing more than 50% of your available credit)
- All credit card relief programs
- Paying your bills after the payment due date
- Credit inquiries
- Collection marks
- Closing cards
Good News about the Program:
A settlement service is the fastest program available that assists consumers with achieving debt freedom.
On a settlement program, one creditor at a time is settled and paid off. As each creditor is paid off, a person’s debt to income ratio will improve.
Debt to Income Ratio refers to how much debt a person has, when compared to their income.
Rebuilding Your Credit Score after Graduating on the
Debt Settlement Program
Once you graduate on a Debt Settlement program, you can then rebuild your credit score.
The program could leave collection marks on your credit report for up to seven years. However, on your credit report it will show a zero dollar balance and that you no longer owe any money on each account that has been settled.
Creditors legally can no longer come after you for any money owed following a settlement that we complete for you. Our negotiators obtain written proof for you that your account has been settled.
After you graduate the program you can immediately start rebuilding your credit score, even if there are a few collection marks still remaining.
There are times when we settle a client’s debt, and the collection agency agrees to remove any derogatory marks following the payment.
We recommend that consumers who are interested in building good credit, read this next page.
Our goal is to assist you with paying off your debt fast and improving your financial health.
Please call us if you would like more information on debt settlement services at 866-376-9846.