How does debt settlement impact my credit score?

Debt settlement can have a negative impact on your credit score in Washington. When you settle a debt, it typically means agreeing to pay back less than you owe. This type of agreement is good for both you and your creditor, as they are able to get a portion of what they are owed and you can get the debt taken care of. However, your credit score will suffer when you settle a debt. When it comes to settling a debt in Washington, the creditor will usually report the debt to the major credit bureaus as "Settled for Less than Full Balance" or "Settled as Agreed." This will have a negative effect on your credit score as it shows that you were unable to pay what you owed in full. This can lower your credit score from 50 to 100 points depending on your credit score before the settlement. Additionally, the time it takes for a settled debt to be removed from your credit report is seven years from the date of the settlement, which can affect your credit score for a long time. Your credit score may recover gradually as time passes and you continue to make timely payments on your other debts. Overall, debt settlement can have a negative impact on your credit score in Washington. It is important to weigh the pros and cons of settling your debt and make sure it is the right decision for your financial situation.

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How does debt settlement impact my credit score?

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