subject: Debt Settlement, Bankruptcy And Credit Counseling – The Effects On Your Credit Report [print this page] Whenever a person who is under debt decides to go for a debt relief program whether it is debt settlement, credit counseling or even bankruptcy to put an end to their problems. The question which troubles them the most is "Will this affect my credit score?". The common answer is yes in almost all the cases. However, in credit counseling the answer is "NO". A notation on your credit report that you are utilizing credit counseling will not lower your credit points.
The most adverse damage which your credit score is likely to receive is when you file for bankruptcy. Bankruptcy as a solution will remain on your credit score for 10 years and with worst results and if you let go the debt amount to collection without settling it then, it will be on the record for 7 long years. If ,you go for the Debt Settlement program it will also affect negatively on your credit record as it will state " payment settled for less than the full balance" and even the usage of debt settlement program will be mentioned there. However, this settlement will affect your credit record only temporarily and your credit situation will be back to normal in nearly 1- 3 years after the amount is settled completely. Unlike, with the case of bankruptcy it does not leave a permanent blot on your credit history for years which would be difficult wipe off.
A person with an affected credit score will not only face problems in getting further loans and mortgages or renting a property but, it will also cause trouble in your career prospects. Credit counseling is the only option which will not have a negative effect on your credit history as it has been eliminated now from the list. You should however choose your counseling agency carefully.
Debt Settlement, Bankruptcy And Credit Counseling The Effects On Your Credit Report
