Hi there. This is Michael Bovee with
ConsumerRecoveryNetwork.com. Thanks for coming to our Debt Bytes
YouTube Channel. I want to continue on with our debt settlement series and
talk about or answer the question that we have most frequently been
asked over the years at CRM. What does that settlement is going
to do to my credit report or my credit score? Well, the answer is actually
different for most people. It depends on who your creditors are,
how far behind you are when you settle, how far these accounts go
before your end of the deal with them and also what your account history
was like, how many accounts do you have good on your credit report
versus go bad. The thinner your credit profile, the longer it takes to
bounce back from debt settlement. The more depth and diversity you have
in your credit profile, accounts that are staying positive while you
are doing debt settlement like mortgage or a car the quicker it is you
can bounce back from debt settlement. One of the biggest things that I have
had to deal with in consulting with consumers over the years is helping
to disabuse the notion that credit is important to when you are
struggling to pay your bills. It is not what you have it is a debt
problem, not a credit problem. If you have the luxury of being more
concerned about your credit report, your credit score and you are watching
this video debt settlement is something you should probably pursue.
It probably means there is other nonconfrontational options that you
can look to, to resolve your debt many of which we talk about in our debt
bytes channel so cruise through the topics here, but also we cover in great detail
at the consumerrecoverynetwork.com website. But more specific to settlement and
your credit score on average when you are able to settle your debts aggressively
and let’s say you can put together a plan to settle five credit
card debts and do it in under 12 months. 2 years after you finish
your last settlements, it is being reported on their credit report as
0 balance owed which is huge by the way because some of your scores
factored on your data income ratio and your work credit utilization. So
when you get through the settlement process those factors that go into
how your credit scores calculate probably another better than they
have in years, you are just going to trade off because a big part of
your credit score is factored on your timely payment history. Obviously
settlement only works if you have fallen behind so you are trading
good payment history for good utilization and the fact that you can
afford debt again a year 2 years after you finish all your settlements.
Credit bounces back. There are three real legitimate reasons
to go out and get credit in today’s economy and if you are already
are struggling with credit card debt, you certainly don’t need new
credit card debt or more credit card debt because you can’t
afford the once you have. That would be dependable transformations
so you can get too and from work, earn and living so you may just
take out a lease and/or a car loan. You need a roof over your head and if
you need a refinance and mortgage sometimes you need to get good interest
rates especially in today’s interest rate environment that makes
sense and debt settlement or volume behind with creditors is going to impair
your ability to do that for sometime or certainly impair your ability
to purchase and get a good interest rate for education so to further
your earning potential personally or to co-sign for a job. Those are
three good reasons to go out and get credit in today’s economy and
you can kind of strategize a debt settlement strategy or around those
credit needs and getting those needs met at a fair price. Debt settlement is not a kill all your
credit report or your credit score. There is a lot of people in the media
and others that have a bias to steering your way from debt settlement
because of their own thought process or because they have some other
tool or something to offer them. When it comes to meeting debt intervention,
debt settlement definitely fits in the intervention category
actually just like bankruptcy or even credit counseling. They all tend
to impact your credit about the same. Not necessarily your credit score, but
certainly your ability to access the credit. So if you weigh your debt
relief options you can certainly look at debt settlement as one a legitimate
option, 2 a detriment to your credit for a prescribed period
of time. I am not sure what it is going to be for you if you want to
learn more about how your credit is going to be impacted and for how
long it really involves getting into a strategy session which by the
way we offer for free. You can call us at our toll free number or
schedule and appointment through our consultation request online on
our website and we will give you an estimate of what your settlement is
going to be given your creditors, balances and then we can also talk
to you about how long it is going to take you to fund all those. And
as a result you will have a real clear picture as to what debt settlement
will do to your credit and for how long.