Does debt settlement hurt my chances of obtaining new credit?

Debt settlement can have an impact on your ability to obtain new credit. In West Virginia, debt settlement is handled by the West Virginia Legislature through West Virginia Code Chapter 48A. If you are successful in settling a debt, such as a credit card debt or medical debt, then the balance owed will be marked as "Paid in Full" on your credit report. This will appear differently than when a debt is simply paid off as it will remain listed as a negative item on your credit score. Partially paying a debt can also affect your credit score negatively, but it might still be better than not paying at all. When you attempt to settle a debt, it may be reported as an “Account Settled” on your credit report. This indicates that you did not pay the full amount, which could reduce your credit score. Your creditors or a collection agency may also report the debt settlement to the credit bureaus, which could also impact your credit score. However, debt settlement does not necessarily mean that your chances of obtaining new credit are completely destroyed. While debt settlement may have a negative effect on your credit score, it may also allow for the possibility of opening new credit. As long as you have taken steps to improve your creditworthiness, such as paying your bills on time and maintaining a low balance on your credit cards, lenders could still be willing to offer you new credit. It is important to research your options and consider all of the potential consequences before settling a debt in West Virginia.

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Does debt settlement hurt my chances of obtaining new credit?

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