How Credit Card Debt Settlement Affects Your Credit Report and What You Can Do About It

Amazon eBook TAC Blog Picture How Credit Card Debt Settlement Affects Your Credit Report and What You Can Do About It

Over the last 15 years, and especially within the last 4 to 5, I can’t tell you how many times I’ve been asked this particular question.  What’s even more amazing is that people attempting to negotiate debts and settle them on their own, which is how I believe debt settlement should be done, have no clue whatsoever to what the actual answer is.

We all know that failure to pay creditors under the terms originally agreed to will reflect negatively on our credit report. But should an account go into collections, one of the consequences of any debt settlement is the damage caused to your credit score. Although the effects of debt settlement on your credit are often unavoidable, there are ways to minimize that damage if you know what to say, and how to negotiate, during the do-it-yourself debt settlement process.

Time to Set the Record Straight

I got tired of reading and listening to the so called “credit and debt experts” continually espouse the view that you have to settle your debt first – then work on improving your credit report second.  Even though your number one priority should always be to settle your debt and move on with your credit and financial life, the fact is; all aspects of debt settlement are negotiable!

The best way I knew how to set the record straight was to create a “Special Report”.  I felt I needed to give you, the Amateur Consumer, a different and substantiated point of view and I wanted you to know there is absolutely no reason why you shouldn’t attempt to manage the damage to your credit report while attempting ‘do it yourself’ debt settlement!

This book will show you how to minimize the damage that will be done to your report by explaining in clear detail how to negotiate your credit rating, with both creditors and collection agencies, during the do-it-yourself debt settlement process. One things for sure; if you don’t ask, you won’t get! And this book will show you how to do both!

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  1. Nelly Brown says:

    It is true that your credit score drops after you settle debt either on your own or through a company. However, it is equally true that you can try to raise your credit score after your debts are settled. My mother had some unpaid credit cards. She was not able to make payments on those credit cards due to my tuition fees, rents and other expenses.

    Once I finished my studies, my mother settled her debts. Her credit score did fall by a few points. However, she tried to properly maintain her credit after settling her debts. She made timely payments on her credit cards. She didn’t cross her credit limit ever. She removed all the negative items from her credit report. All these steps helped to increase her credit score gradually.

    • Debt settlement absolutely drops your credit score and depending on your mother’s score and credit profile at the time those debts were settled, her credit score could have taken a significant drop.

      Time and better payment behavior moving forward always help to increase your credit score exactly as you said – gradually. Thanks for leaving the comment Nelly.

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