My credit score is 645 how much will it hurt my credit if I did a debt settlement?

Question

My credit score is 645 how much will it hurt my credit if I did a debt settlement?

Answer 1

Don't settle if you can possibly avoid it.  Try to make payment arrangements with the creditor.  Not only does it affect your credit, but there are also tax implications.  Example--$5000 debt---you agree to a settlement of $2000.  This leaves $3000 not paid.  Anything over $599 of the $3000 that the company wrote off is reported to Internal Revenue.  The IRS considers this as income for you and you would receive a 1099 for $2401 that you would pay taxes on.  ***

Answer 2

I would advise against it if you can pay your bills on time. Your credit score will take quite a hit for awhile if you settle debt instead of paying in full. Only do debt settlement if your sure you cannot pay on time. Obviously, if you can't pay on time, then do the settlement. Better to mess up your score now and start rebuilding than missing payments, messing up your score, then having to settle then try fixing your score.

Answer 3

It depends on the status of the account. If it is current, then pay it off as quickly as you can. If it is delinquent or heading in that direction, then work out a settlement with a written agreement to have the account deleted once they receive payment. DO NOT settle the account unless you receive something in writing that clearly indicates the account will be deleted. I have been in the debt settlement business for 20 years and I'm here to tell you that, YES you can do it!

Answer 4

Hi,

I used "Credit Solution" to settle my debt and improve my credit score.They managed to reduce my debt up to 58%.It's legitimate. Icame across this company on NBC News Special Edition.Check it out here:

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