Debt Settlement - Would You Accept a Lower Credit Score to Eliminate 60% of Your Debt?
There are many experts who point out that dead settlement will lead to a drastic fall in the credit score.
They use this as a criticism of debt settlement.
It is true that debt settlement and bankruptcy will lead to a fall in the credit score.
However, is this factor alone sufficient to conclude that a settlement is no different than a bankruptcy? Is it enough for individuals to conclude that the settlement causes more harm than good? Consider the following points before arriving at a conclusion.
Debt settlement is usually offered to those individuals who owe more than ten thousand dollars in the form of unsecured debt.
You will not qualify for settlement if you are repaying your debts on time.
Rather, credit card issuers offer settlement to those borrowers who are at the brink of becoming bad debts.
The settlement is a last ditch effort by the lender to recover at least forty percentage of the original amount owed.
Needless to say, the lender shall not be keen on making such a last ditch effort unless bankruptcy is very close.
Rather than pushing the man towards bankruptcy, the idea is to get at least partial repayment.
Hence, keeping the larger picture in mind, a fall in the credit score resulting from bankruptcy is not the same as a fall due to the settlement of the debt.
Another reason why one should not hesitate to accept a fall in the credit score due to the settlement is that the fall can be reversed quickly.
All you have to do is take steps to aggressively promote your credit score.
Some remedies will offer short term benefits while other remedies will offer long term benefits.
You just have to choose the right remedy and implement it aggressively and you will find that your credit score improves very quickly.
Your credit store can easily be improved with the help of smart financial tactics even though you have a debt settlement on your credit history.
The same is not possible with bankruptcy.
Once you declare bankruptcy, lenders will be wary of lending money even though you have now become a responsible borrower.
They use this as a criticism of debt settlement.
It is true that debt settlement and bankruptcy will lead to a fall in the credit score.
However, is this factor alone sufficient to conclude that a settlement is no different than a bankruptcy? Is it enough for individuals to conclude that the settlement causes more harm than good? Consider the following points before arriving at a conclusion.
Debt settlement is usually offered to those individuals who owe more than ten thousand dollars in the form of unsecured debt.
You will not qualify for settlement if you are repaying your debts on time.
Rather, credit card issuers offer settlement to those borrowers who are at the brink of becoming bad debts.
The settlement is a last ditch effort by the lender to recover at least forty percentage of the original amount owed.
Needless to say, the lender shall not be keen on making such a last ditch effort unless bankruptcy is very close.
Rather than pushing the man towards bankruptcy, the idea is to get at least partial repayment.
Hence, keeping the larger picture in mind, a fall in the credit score resulting from bankruptcy is not the same as a fall due to the settlement of the debt.
Another reason why one should not hesitate to accept a fall in the credit score due to the settlement is that the fall can be reversed quickly.
All you have to do is take steps to aggressively promote your credit score.
Some remedies will offer short term benefits while other remedies will offer long term benefits.
You just have to choose the right remedy and implement it aggressively and you will find that your credit score improves very quickly.
Your credit store can easily be improved with the help of smart financial tactics even though you have a debt settlement on your credit history.
The same is not possible with bankruptcy.
Once you declare bankruptcy, lenders will be wary of lending money even though you have now become a responsible borrower.
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