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Does National Debt Relief Hurt Your Credit?
National Debt Relief is one of the leading debt settlement companies in the United States that has helped thousands of people get out of debt. Debt settlement is a form of debt relief that involves negotiating with creditors to accept less than the full amount owed in exchange for a lump sum payment. While debt settlement can be an effective way to reduce your debt, many people wonder if it negatively affects their credit score. In this article, we will explore whether national debt relief hurts your credit and what you can do to minimize the impact.
How National Debt Relief Works
When you enroll in a debt settlement program with National Debt Relief, you will stop making payments to your creditors and start making monthly payments to an escrow account. This account is set up by National Debt Relief and is used to accumulate funds that will be used to pay off your debts later on. The company will then negotiate with your creditors to settle your debts for less than what you owe. Once a settlement is reached, you will use the funds in your escrow account to pay the creditor.
The Impact of Debt Settlement on Your Credit Score
Debt settlement can negatively affect your credit score. Late payments and delinquencies will be reported to the credit bureaus, and your credit score will suffer as a result. In addition, settling debt for less than what you owe will also have a negative impact on your credit score. This is because creditors view settled accounts as a sign that you were unable to pay your debts in full.
In general, the higher your credit score is, the more it will be affected by debt settlement. If you have a high credit score, you could see a significant drop in your score after enrolling in a debt settlement program.
How to Minimize the Impact of Debt Settlement on Your Credit Score
While it is true that debt settlement can negatively affect your credit score, there are things you can do to minimize the impact. The most important thing you can do is to make sure you stay current on all your bills. Late payments and delinquencies will negatively affect your credit score, so it is important to make sure you make all your payments on time.
Another thing you can do to minimize the impact of debt settlement on your credit score is to enroll in a credit monitoring service. This service will alert you to any changes in your credit score so you can take action to address any issues. You can also check your credit report regularly to make sure everything is accurate and up-to-date.
Frequently Asked Questions
Q: Will debt settlement affect my ability to get credit in the future?
A: Yes, debt settlement can affect your ability to get credit in the future. Most lenders view debt settlement as a negative mark on your credit report and may be hesitant to lend you money.
Q: How long will it take for my credit score to recover after debt settlement?
A: The amount of time it takes for your credit score to recover after debt settlement depends on a number of factors, including how high your score was before you enrolled in the debt settlement program, how many debts were settled, and how long ago the settlements took place. In general, it can take several years for your credit score to recover after debt settlement.
Q: Can I negotiate debt settlement on my own?
A: Yes, you can try to negotiate debt settlement on your own. However, it can be difficult to negotiate with creditors and settle your debts on your own. Debt settlement companies like National Debt Relief are experienced in negotiating with creditors and have a higher success rate in settling debts.
Conclusion
National Debt Relief is a reputable debt settlement company that can help you get out of debt. However, debt settlement can negatively affect your credit score, so it is important to understand the impact it can have. By staying current on all your bills, enrolling in a credit monitoring service, and regularly checking your credit report, you can minimize the impact of debt settlement on your credit score.
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Article Summary:
National Debt Relief is a US-based debt settlement company that negotiates payments for clients so that they only pay a fraction of the full amount they owe. Although debt settlement is an efficient means of reducing client debt, it does have negative effects on credit scores. Late payments and unpaid debts are reported to credit bureaus, and settling debt for less than one owes is viewed as an inability to pay debts in full. Under such circumstances, the higher one’s credit score, the greater the reduction in score, which can last several years.
