Debt settlement and the after effects – Is it possible to boost your credit score again? By Jenny Roberts
If you don’t know how to deal with your debts you must immediately take some steps in order to stay sure about your personal finances. As the US is donning a double-digit unemployment rate, most people are trying to look for jobs and are not getting enough funds to repay their surging debt burden.
Among all the debt relief options, debt settlement is the only one that allows a drastic reduction of the principal balance owed by you. However, the most important thing that you must know about debt settlement is that it hurts your credit score and a settlement stays on your credit report throughout the nest 7 years. This doesn’t make debtors refrain from getting help of debt settlement companies as there are number of ways in which the credit score can be improved. Read on to know more on this.
The simple benefits of debt settlement
Debt settlement has got some particular benefits that make it an attractive option to most debtors. If you’re knee deep in debt and you want to know the advantages of settling your credit card debt, here are some of them.
- Negotiations on your behalf: The debt consultant will make negotiations on your behalf and therefore you need not stay in touch with your creditors. All the credit card companies will be able to get their payments from the debt settlement company and thus they will not call on you and ask for the payments.
- Single monthly payment: As soon as you come to know that your debts are settled, you can immediately start making single monthly payments to the company. You may get rid of the multiple payments that you make in a particular month and replace it with a single monthly payment.
- Reduction of the principal amount: The principal amount that you owe will be reduced by effective negotiation with your creditors. You will no longer require paying the entire principal amount that you owe them. A part of your debt will be forgiven by the creditors and you can easily repay the entire amount.
How can improve your credit score after a debt settlement?
It is true that debt settlement affects your credit score to a great extent as you’re not repaying the entire amount that you actually owed your creditors. However, it is possible to improve your credit score with ease by following certain steps. You may get yourself a secured credit card in order to show your eagerness to repair your credit. You can also manage your personal finances and make sure that you repay your debts on time so that you can improve your credit score and make yourself worthy of receiving further lines of credit.
Therefore, you need not worry if you’ve decided to choose debt settlement as your debt relief option. Take the required steps to avoid falling in debt and also do the needful to improve your credit score.
Wishing you Success and Prosperity,Wishing you well,
Daniel R. Murphy
Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.