How Does Debt Settlement Affect Your Credit Score?
Debt settlement is a process that many people use to reduce the amount of money they owe. It allows them to pay off their debt for less than what they originally owed, but it can also have a substantial impact on their credit score. Understanding how debt settlement affects your credit score is essential if you are considering this option.
When you enter into a debt settlement agreement with your creditors, the full balance of the debts will be reported as “settled” or “paid in full for less than the full balance” on your credit report. This can cause your credit score to drop by up to 200 points or more depending on several factors such as the size of the debt and payment history prior to settling it. Additionally, any late payments that occurred before settling will still remain on your report which could further damage your credit score.
The Law Offices of Omar Zambrano has helped thousands of people and businesses in the past to get out of the debt and start over.
Our goal is to help you find a fresh start FAST!
Schedule your free consultation today! By Calling 626-338-5505 or visiting us at 12738 Ramona Blvd Baldwin Park CA 91706