Learn About Debt Relief: What It Is And When You Should Seek It
How Does Debt Relief Affect Your Credit?
Debt relief can affect your credit reports and credit scores; however, the real impact relies on whatever option you choose and where your credit score began. You may need to be several months behind on payments to negotiate a debt settlement arrangement.
Most of the damage to your credit may have already been done, as late payments can hurt your score. If your creditors continue to record the account as paid as promised, a debt management plan may have little influence on your credit.
Credit counseling could not affect your credit. If you can minimize debts and make payments on time after developing a repayment plan, it may even assist in enhancing your credit score.
Before agreeing to any form of loan or credit card relief plan, read the tiny print to be sure there is no mention of credit score consequences. It’s also a good idea to keep an eye on your credit reports and scores frequently to spot any changes.
Bottom Line
If you’re burdened by debt, debt relief can help you see the light at the end of the tunnel. It can also help to avoid the need to file for bankruptcy. Understanding what you intend to gain from debt reduction and how it can assist you is essential for selecting the best solution.
