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.

Whereas filing Chapter 7 bankruptcy can enable you to begin rebuilding your credit almost immediately, Chapter 13 bankruptcy will make it more difficult for you to rebuild credit for several years. At the far end of the spectrum is consumer credit counseling, which prevents you from rebuilding your credit until all your debt has been discharged—usually from four to five years.