Settling Credit Card Debt And Credit Score
Posted on November 3, 2009 at 1:44 am
What's the score on that? No pun intended... I just want to know if there's a direct correlation between settling credit card debt and credit score... I want to settle my debt and see how doing so would effect my score. Thanks
Posted on November 3, 2009 at 2:12 am
If you are to settle a debt, your credit score would have already been in a bad state then, because these debts have fallen behind on payment. If you decide to settle your debt, your credit score will not go down any further.
Posted on November 3, 2009 at 2:34 am
If you're thinking of settling credit card debt and credit score, WonderGurl's right--settling the debt won't affect your score per se. It will appear on your report, however, as "settled."
Posted on November 3, 2009 at 2:51 am
settling credit card debt and credit score
To add to that, debt settlement stays on your report for 7 years. It's not as bad though as a bankruptcy, although a Chapter 13 also stays on the report for 7 years. Bankruptcy is on your public records for 20 years, a settlement, no.
Posted on November 3, 2009 at 3:11 am
Just to add to what Karess' said about settling credit card debt and credit score:
Here's a breakdown of the FICO score. See which segments are affected by debt settlement (account past due, has stopped paying the creditors and will continue to do so until enough amount has been saved..)
-35% Payment History- 30% Amount Owed-15% Length of Credit History
-10% New Credit
-10% Types of Credit Used
Also, a debt settlement appears on the credit report as "settled", "settled for less than the full balance", or "settled in full."