Is credit card debt settlement bad for your credit?
March 12th, 2009
stan450z asked:
I am a senior in college, I have no job now as I am finishing school. I start work in June, and I actually have good credit, over 700, and 5k in credit card debt. I’ve paid my bill in full always in the past until my last killer spring break. Debt settlement sounds cool to cut the debt in half which I would pay off with a lump sum, or should I just stomach it for another month where I can pay it all off entirely in full. Thanks.
I am a senior in college, I have no job now as I am finishing school. I start work in June, and I actually have good credit, over 700, and 5k in credit card debt. I’ve paid my bill in full always in the past until my last killer spring break. Debt settlement sounds cool to cut the debt in half which I would pay off with a lump sum, or should I just stomach it for another month where I can pay it all off entirely in full. Thanks.
Debt settlement is a great program for those who are no longer able to keep up with their minimum payments to their creditors, or are looking for a solution to pay off their debts much sooner than continuing to pay minimums. However, debt settlement is a process which takes at least 3-6 months to work it’s course, and could potentially effect your credit during that time. I would say your specific situation wouldn’t warrant debt settlement and it would be best to pay your debt in full within a month since you will have those funds available.
Debt settlement is for people who cannot continue to pay their min payments and are most likely already delinquent on their accounts. Debt settlement is a great program for that scenario. Debt settlement is not what harms your credit, it is the fact that you are unable to stay current on your debts and have a large amount of consumer debt. Until the debt is gone, you credit will be hurt. Debt settlement is the quickest way to get rid of the debt and avoid bankruptcy. Once the debts are settled, your credit will heal again and does not have the debt to hold down your scores. If you are in a situation where you cannot stay current on your accounts or cannot pay any more than the mins on a large amount of debt, debt settlement is most likely your best option. get a consultation and see what the pros and cons are for your specific situation http://www.eDebtHelp.com