Business & Finance Debt

How Bad Does Debt Settlement Hurt Your Credit?

The question of how bad debt settlement can effect your credit is really a relative one.
Much of this will depend on the service that you decide to go with.
For companies of ill repute that use poor practices, it can have a seriously negative impact on your credit.
The reason for this though is not because of the actual settling, but rather the practices that the company uses to settle your debt.
Many times these companies will default and settle on your loans without telling you.
This will dramatically effect your scoring in a negative way.
Now for the good side.
A quality company can positively effect your credit scores.
These companies will work with you and your creditors to establish a system of payment to get you free of financial obligations.
If you can complete this program it will look extremely favorably on your report and you will be able to once again apply for loans and other credit without fear.
This is because through the company you can set up constant and scheduled payments.
Showing the ability to do this is one of the most important things that creditors look for.
So while reports may be out there saying the settling of your indebtedness is bad, this is only true in the minority of companies.
Do the proper research and you will be able to settle with no negative impact to your credit, and in fact may be able to walk away in the end with a much more positive rating.
The worst thing you can do is default on your debts so get the help you need from the right source and get back on track with your payments as soon as possible.
By the way, by researching and comparing the best debt settlement services in the market, you will be able to determine the one that meet your specific financial situation.
Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

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