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 Posted: Fri May 09, 2008 4:06 am Subject: debt settlement affects credit score |
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Dear Guest,
| Quote: | | I was just wondering how much can your score go down? |
debt settlement (or Negotiation) can drive down your credit score by 250 or more points.
Moreover, it will negatively affect your credit report for 7 long years and will create difficulty for you to get new credit during this period. Hence, I would ask you to avoid debt settlement until and unless you are on the brink of bankruptcy.
| Quote: | | is it possible for it to go back up? |
Yes, you can always improve your credit score if you start paying up your debt and decrease your total outstanding balance. As the debt starts decreasing, your debt-income ratio will start decreasing (i.e. the total amount of accumulated debt in relation to your income) and will consequently improve your credit score.
Regards,
Phoenix
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Phoenix
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| Posted: Fri May 09, 2008 6:12 am Subject: |
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250 points!!??!!?? No wonder the debt settlement companies I talk to won't give me a straight answer when I ask about this. Holy sh!t. It would be IMPOSSIBLE for me to get a new apartment with a credit score that obliterated (I'm in NYC and have to leave my apt when the lease is up because the building is just horrible beyond reason. You have to have a decent credit score here to get into a decent place).
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matt
Joined: 22 Apr 2008
Posts: 13
Debtcc Points: 169
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| Posted: Fri May 09, 2008 8:20 am Subject: |
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debt settlement is a program for people who are in a hardship. If you can afford to do a credit counseling program you should.If not and ONLY if you can`t afford a DMP than you should consider Settlement. Debt settlement is an aggressive program and best for consumers that don't qualify for debt management, can't continue paying minimum payments, can't borrow to pay off debts and don't want to file bankruptcy. Basically Debt Settlement is for people who are overextended and credit is basically already shot. I work with a company that offers both Credit Counseling and Settlement. We always do a budget first before we even suggest any type program. We would NEVER enroll someone into a settlement program who can afford to pay there bills , instead we would suggest a DMP with a Credit Counseling Company. Unfortunately most company's only offer one option or the other and they put their spin on why that potential client needs to do their program and not the other. Heck , most company's don`t even do a budget first before they enroll them.They are just worried about getting the first payment and who cares if they drop out of the program later. Now how in the world can someone suggest a monthly payment you can afford when they don`t even know what your other expenses are !!!! Please be careful when looking into any company and look them up on the BBB to make sure they have a good track record.
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mobile0311
Joined: 05 May 2008
Posts: 1350
Debtcc Points: 7169
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| Posted: Mon May 12, 2008 1:58 am Subject: Hi |
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Hello Matt,
From your post it seems to me that you are in a severe debt problem. Is it so? What is your credit score now?
Are you planning to go for a debt settlement program? If so, then please give a second thought to it because Debt Settlement is a program meant for avoiding bankruptcy and its severely negative consequences.
Try to consider a debt management Plan or go for a credit counseling Session even before thinking about Debt Settlement (as rightly mentioned by MOBILE in the previous post).
Regards,
Phoenix
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Phoenix
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| Posted: Mon May 12, 2008 2:09 am Subject: Thanks |
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Dear Mobile,
Your comments and suggestions are really informative and helpful. Looking forward to more such useful suggestions.
Thanks and Regards,
Phoenix
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Phoenix
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| Posted: Mon May 12, 2008 7:36 am Subject: |
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I own a debt settlement company and just a heads up any company that tells you that your credit will be improved is a lye. Also any company that tells you on there website what they can reduce your debts by is also a lye. We have been working with our attorney closley to taylor our business model towards the Universal debt management Services Act (UDMSA). Be careful of any company just selling info or education materials.
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| Posted: Mon May 12, 2008 7:41 am Subject: |
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It depends on what your credit looks like now. If you have good credit it will drop your score. 250 points I dont know about that but it will drop it. If you have bad credit now it may not lower it as far as if you had good credit. Also it's not debt settlement that hurts your credit it's the fact that you don't make monthly payments is what hurts your credit. Also it doesn't stay on your credit for 7 years thats credit counseling.
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| Posted: Mon May 12, 2008 1:02 pm Subject: |
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Thanks Phoenix for the compliment. You should become a member here as well to help provide your knowledge to help others as well.
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mobile0311
Joined: 05 May 2008
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