by Don Wilson
You can save money with debt settlement. Do it correctly, or you will lose a bunch of money. Debt settlement affects your credit negatively because you are not paying it all. Say you have a bill going to collections and it is $500.00 and you can settle is for $200.00. Your creditor wont tell you but it could change your credit by 50 points depending on your credit already.
How much your credit will be affected will be different for each person. If your score is very high then it will go down a lot more than someone with a lower credit score. There are different factors that cause your score to change but the higher it is the more it goes down.
Let me give you some numbers to clarify this. Say you just settled that bill and lost those 50 points on your credit report. Usually when people settle bills they settle more than one bill at a time. That 50 points can be a one, two, or even three or more percent increase in your interest rate on future loans. Credit cards can suffer even higher interest jumps. Over time these interest charges can cost you easily 10 - 20 times more than what you save when settling bills.
In short, take into consideration all of the impact that settling a debt has on you. Debt settlement is good at some times. Say you don't want to keep paying your landlord rent and want to buy a home so the money goes into your pocket, but the loan officer wont give you the money because the bill that is on your credit report. Debt settlement has more of an advantage in this situation then not.
Debt settlement is a very powerful tool to save money and get yourself out of debt very quickly. There is an art to doing it right. Learn how to do it correctly before you start settling your bills because it is the easiest way to save a bunch of money and get out of debt fast. The more leverage you can gain over your creditor the more you will be able to settle off of a debt. - 41115
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New Unique Article!
Title: How Does Debt Settlement Affect Credit Since Your Not Paying In Full
Author: Don Wilson
Email: owner@beatdebttoday.com
Keywords: Debt Settlement,Credit Repair,Settling Debt,Credit,Debt Consolidation,Debt Relief,Credit,Debt,Finance
Word Count: 358
Category: Finance:Credit
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