How will a Debt Settlement Plan program affect my credit?
If you have relatively good credit to begin, your credit profile will be temporarily negatively affected during the duration of the settlement program: the possibility of lawsuits by creditors and/or a credit score that will initially drop during the early stages of the program. Also, debt that is settled will be identified on a client’s credit report as “paid as agreed” or “settled for a lesser amount” or “paid in full”. One of the biggest reasons a person has bad credit is NOT their payment history, but how much available credit they have and how much they use. Using more than 35% of the available credit can bring down your credit score. Your creditors may try and threaten you with bad credit and tell you that if you don’t make your minimum payment, you will have bad credit for 7 years. But, if you make just the minimum payments to your creditors, you can be in debt for 30 or more years. They WANT you to make payments for 30 years, since their profit comes from the compounding intere
