In determining what effect a Debt Settlement program will have on your credit it is important to know what your credit score currently is. There are very few people with debt trouble that have near perfect credit scores to begin with. It is a fact that Debt Settlement programs generally have a negative effect on your “FICO” score. Although as the Debt Settlement program nears completion and your debts are satisfied your score will begin to improve again. This happens because you are becoming debt free. It is my recommendation that you should not apply for any new credit while going through a Debt Settlement program. It just doesn’t make any sense to take on any new debt while trying to satisfy your existing debt issues.
If you are concerned with your credit score and the negative effect a Debt Settlement program will have, it is important to reflect on what you credit score is currently doing for you. Have you tried to apply for any new credit? Have you applied for a consolidation loan through your bank? Have you applied for a Home Equity Line of Credit? If you have applied for any of these recently you have probably been denied, either for your low credit score or your high debt to equity income ratio. At this point your credit, if it’s high, isn’t doing anything but holding you back from tackling your debt issues. You can rebuild your credit, a Debt Settlement program is not permanent on your credit score like a bankruptcy. Believe it or not credit card companies have a very short term memory and they will most likely extend credit to you again in the near future.
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