What will happen to my credit score after a successful debt settlement?

The effect of a successful debt settlement on your credit score depends on a few things. In Washington, when a debt settlement is successful, the debt that was settled is usually reported as “paid in full”. This is often less damaging than if the debt was reported as “settled” or “partially settled”. A “paid in full” credit report may result in a lower credit score than if the debt was paid off in full, however the decrease is usually modest and temporary. If you make all of your payments on time and keep current on any other debts, your credit score should steadily increase after a successful debt settlement. Other factors such as having enough history with a variety of credit products, using credit responsibly, and having a low debt-to-income ratio should also help your credit score improve. In general, debt settlement can negatively affect your credit score because you are not paying the full amount of the debt. However, if you are in a tough financial situation and the only other alternative is bankruptcy, debt settlement may be a viable option. Once the settlement is complete, your credit score should begin to strengthen as long as all other debts are paid on time and you use credit responsibly.

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What will happen to my credit score after a successful debt settlement?

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