Does debt settlement hurt my chances of obtaining new credit?

Debt settlement can affect your chances of obtaining new credit in California. While the process of settling your debt may help lower your current debt, it may also have a negative effect on your credit score. This is because debt settlement negatively impacts your credit score, which is a major factor used to decide if you will qualify for new credit. The most significant way that debt settlement can hurt your chances of obtaining new credit is that it will show up on your credit report as a ‘settled debt.’ This means that the creditor accepted a lower amount than what was originally owed, and this will be noted on your credit report. This negative mark on your credit report could cause potential creditors and lenders to think twice before giving you new credit. In addition, the debt settlement process will also add more time to your credit history. This, in turn, could lead to lower credit scores, as it raises the overall amount of the debt on your record. Finally, debt settlement could also damage your relationship with creditors. This could lead to future creditors denying you a loan or line of credit as they view you as a greater risk. In conclusion, debt settlement in California may hurt your chances of obtaining new credit, as it reflects negatively on your credit report, takes more time to complete, and could lead to damaged relationships with potential creditors.

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Does debt settlement hurt my chances of obtaining new credit?

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