Posted on
July 17, 2009
at
3:33 am
how would debt settlement affect the credit ?
Posted on
July 17, 2009
at
3:38 am
Did you mean what is debt settlement's effect on your credit report? It has a negative effect on your payment history which is 35% of your credit score, because the debt settlement program requires the consumers to stop paying the creditors to be able to save a certain amount for negotiation. Creditors also would also only settle accounts that are past due. Which would not matter to you if you are already behind on your payments.
Posted on
July 17, 2009
at
3:42 am
A debt settlement affects your credit negatively, as what x and y have said, but on the other hand, settling your debt will improve your debt to income ratio.
Posted on
July 17, 2009
at
3:48 am
I agree with they've said and to elaborate on those points, here's a breakdown of your credit report:
-35% of your credit score is determined by your payment history- 30% is by the amount owed-15% by the length of credit history-10% by new credit -and 10% by the types of credit you used The longer you don't pay the more negative its effect is on the payment history segment of your credit score- until your debt is settled. On the other hand, the debt being settled improves, the amount owed segment of your report.
Posted on
July 17, 2009
at
3:50 am
A debt settlement also reflects on your credit report as “paid” or “settled.”
Posted on
July 17, 2009
at
3:54 am
i see..and how will it be received by future creditors and lenders?
Posted on
July 17, 2009
at
3:58 am
I suppose you would be marked as one of those "risk" debtor. That doesn't mean though that it would be impossible for you to obtain or be extended a loan/credit in the future. You just have to keep on trying and expect that at first, you'd get a yes from lenders that charge high interests.
Posted on
July 17, 2009
at
4:00 am
To clarify on some comments, those numbers given by damon and graham are your credit score, which is in your credit report too, together with the notes "settled" or "paid."
Posted on
August 10, 2009
at
9:21 am
Ok lets clairfy something here: debt settlement will not show as "paid" or "paid in full." Typically, the account will show as "settled", "settled for less than the full amount" or "settled in full." The focal point is the word settled, which is negative, since it demonstrates an inability to pay the debt back in full. Also, a settlement remains on the credit report for 7 years from the date of the settlement. So this should should shed some light on the debt settlement affect on the credit report.
Posted on
August 11, 2009
at
1:04 am
Will the debt settlement affect on my credit report stay longer than a bankruptcy?
