6 Thoughts on does debt settlement permanantly damage your credit score?
  1. Reply
    nothingconstant
    October 30, 2011 at 2:12 am

    There’s a lot going on with debt settlement.

    Did you rescind the original contract and begin a new one saying you would pay X amount for settlement?

    If not, then you will ALWAYS be liable for that debt. What most people don’t know about is a thing called “consideration” which is a very vague term but basically means something you promise in a contract that “you are not legally obligated to do”. So if you make a side ways verbal “contract” then they will take the money and report the unpaid balance to a collection agency.

    Make sure your contracts are in line…

  2. Reply
    robert w
    October 30, 2011 at 2:23 am

    debt settlement companies are not the way to go. u’ll be considered as having filed bankruptcy when looking for home loan.
    visit daveramsey.com to learn the hard lessons from others mistakes

  3. Reply
    OC1999
    October 30, 2011 at 2:31 am

    Nothing is permanent. Negative information can only remain on your report for 7 years. With the way credit scores work is that they give more weight to recent items.

    In terms of scoring there is no difference between a “settled in full” account and an account that was “paid in full”. This is because the collection account remains but has a 0 balance. While both of these look better than an unpaid collection account, they are not as good as it not being there in the first place.

    So when you negociate to pay these debts, you need to include that they will remove the collection account once paid. This will then be like it never happened. When you do this be sure to have the agreement from them in writting before you send any money.

  4. Reply
    Duane B
    October 30, 2011 at 3:23 am

    No, but it will make your score drop. Debt setttlement is a little bit better than filing bankruptcy and your credit will recover, but only with hard work on your part!

    Go to the website below and read it all! This site is all about easy credit repair and doing it yourself and knowing when to hire help! It dispells a lot of myths about how credit really works, including what happens when you go cash only and don’t establish a credit rating!

    I got my credit score from 480 to 709 with the help I got from this site! It is worth your time and get the RSS feed to since new information is constantly being added to it and you will be on top of it when it does add it.

  5. Reply
    Michael M
    October 30, 2011 at 4:12 am

    seven long years this will follow you
    sorry work in the industry and that is the rule

  6. Reply
    StephenWeinstein
    October 30, 2011 at 5:05 am

    No. Only for 7 years. Not permanently.

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