Settling DebtPosted on February 14th, 2011 | admin
The first question most people have about settling debt is usually “Will settling credit card debt hurt my credit rating?”
The answer is:
Yes, settling a credit card debt will hurt your credit rating because this will appear on your credit report however settling debt on credit cards and personal loans is a better choice than having to file bankruptcy.
A debt settlement hurts your credit rating less than filing bankruptcy because when you file bankruptcy you basically walk away from all debts owing to your creditors and settling debt means that you are paying back a portion of the debt owing for a few cents on the dollar versus not paying anything at all.
So when you are looking at offers from debt settlement companies to help you get your finances back in control what will happen once you’ve enrolled in a program for settling your debts the debt settlement company will handle all the legal negotiations involved in settling your debt.
Settling debt will certainly hurt your credit score however you’ll be able to build your credit back faster than if you filed bankruptcy so it’s better to get a debt settlement company for your long term financial goals than it is to file bankruptcy.
If you are feeling the pressure of debt collectors calling and the stress has become too much and you want to avoid bankruptcy then it’s time to get a debt settlement company on your side to help in settling debt.
What Should I do to Decide between Settling Debt Versus Filing Bankruptcy
The first step you must take when dealing with harassing credit collections calls is to make sure the credit bureaus have accurate information about you on file.
Get your credit score from Experian now and get a 3-in-1 credit bureau report containing the facts about your credit score from all 3 major credit bureaus to ensure ALL financial information is correct before you take ANY action that could hurt your credit score.
Stay tuned to find out what your next steps should be before settling debt so make sure you order your credit report from Experian before you make any rash moves pertaining to your personal finance.
If you have any questions about settling your debt, filing bankruptcy or anything that’s on your mind about anything that could hurt your credit score go ahead and post your questions on this blog post.