How will debt settlement affect my credit?

How will debt settlement affect my credit?

Debt settlement will have a negative impact on your credit. When a debt is settled for less than its full value, the creditor will note that on your credit report. The damage is much less than you would experience with bankruptcy or default, and in most cases your credit will improve within a couple of years.  However, during a debt settlement program you are NOT remaining current on monthly payments, so this will hurt your credit score (payment history is the largest variable in credit scoring models) while you are in the program.

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