How much my credit score can decrease due to debt settlement?
Since you are not paying the
Since you are not paying the debt in full, the creditor or debt collector will update your account as Paid as settle. The listing will stay 7 years on your credit. Thus, your credit score will drop. You need to pay the tax on the total amount you save in a settlement. So, yes, the impact will be more, if you repay more debts through a settlement.
Submitted by Sanders Patricia on Wed, 01/23/2019 - 03:31
Hi!
Hi!
What is your credit score? It is tough to say how much your credit score will drop. It's really difficult. If your credit score is above 700, then there would be a significant impact on your credit score. If your credit score is low, then there will be less negative impact on your credit score.
Will it be the same if I settle 4 debts?
No. It won't be. The impact will be more because you're not paying the full amount on 4 accounts. Nevertheless, you can build credit various ways. Plus, if you can convince your creditors to update your account status as 'paid in full', then there won't be any negative impact on your score.
Does it depend on the settled amount?
Much depends on the settled amount. If you're paying much less than what you owe, then obviously the FICO scoring model will view it negatively.
Yes it will affect more if
Yes it will affect more if you settle 4 debts instead of 3. It'll also depends on the settled amount. If you pay less than you owe, it'll harm your score badly.