Posts Tagged → debt settlement programs
Credit Score Effects Of Debt Relief Solutions
Millions of consumers have gotten themselves in trouble with their unsecured debt during the economic downturn we’re currently experiencing. Many of them have realized the absolute need to find a good solution to the problem they now face, which for too many of them may be the prospect of spending the remainder of their working lives paying down their debt. A common concern expressed by those seeking relief is what effect the various solutions, such as debt settlement programs, will have on their credit, so I’ll address the issue here.
Consolidating unsecured debt by getting a loan or using a home equity line of credit (HELOC) can lower a credit score, but usually the effect is relatively minor. Enrolling in a debt management program (DMP) through a Consumer Credit Counseling Agency will not lower a credit score, but notations will be made on the credit report which can negatively impact new applications for credit. Debt settlement programs will do credit damage, however most consumers who need a settlement program either already have damaged credit or they anticipate credit damage if they don’t do something about their debt problem. Bankruptcy, both Chapter 7 and Chapter 13, does severe credit damage for 7 to 10 years.
