Is Debt Settlement the Best Option for You?
When it comes to credit of any kind, the only way to keep your credit rating high is to pay your debts in full, on time, all the time. There is no doubt that your credit rating will be adversely affected by debt settlement. But if you are already behind on your bills, your credit may already be bad. Different debt relief options will have different effects on your credit rating, and debt settlement probably falls on the less-damaging end of the spectrum. Getting rid of your debt through debt settlement is a first step toward rebuilding your credit. Once your debt settlement is complete, if you make your mortgage and car payments on time and follow certain credit rehabilitation principles, you should be able to regain good credit within just a few years.
Being Debt-Free is Within Sight
As a practical matter, what we have seen is that if your credit is very good, and you have a mortgage and a car payment that will be continued to be made, your FICO score will drop between 100 and 150 points in the first six months of the program. Then, as settlements are made, the FICO score begins to rise at about month 7. My clients tell me that their FICO score is back to within about 50 points of the original score by the time all the debt is settled (at Trident, our maximum plan is 2 years in length). As a general rule, you can regain your FICO score entirely within 18 months of the time you are debt-free.