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It definitely affects your credit history and score. However, whether it affects it for the positive or negative is questionable. Debt settlement, as you probably know, is the process of hiring a company or individual to act in your interest and bargain with your creditors. These companies will attempt to either reduce the amount of money that you owe or change the terms of your debt If the latter, this will increase the amount of time that you have to pay off your debts and/or decrease the interest rate. This probably will not affect your credit score. If it does, then you credit score will likely be hurt.

If the company chooses to decrease only the amount of money that you owe, it is likely that the debt settlement process will harm your credit. This is because debts that are settled show up on your credit report as such, and creditors see this as being a strike against you, an indication that you were unable to pay that debt. However, there is the fact that the amount of money that you owe is reduced. Your debt to income ratio is the single largest portion of your credit score. Therefore, it is possible, but unlikely, that your credit score could be increased by going through this process.

Finally, you have to consider your other alternatives. The most likely one is probably bankruptcy. Choosing to go bankrupt over settling your debt would be a horrible mistake. Bankruptcy is the single worst thing that you can possibly do to harm your credit score. And even worse, the penalty never wears off, whereas the penalties that you accumulate from debt settlement wear off after only seven to ten years. Therefore, it is far, far better to settle your debt than most anything else with similar results.

Finally, by researching and then comparing as much debit settlement providers, borrowers will be able to identify the agency that meet your financial situation properly, plus the cheapest interest rate the market is offering. For example, read our last debt management service review: Debt Help 101 Review.

Nonetheless, it's advisable working with a seasoned and reliable debit counselor before arrive to any conclusion, this way you save time through specialized advise & money by getting the best results in a short span of time.

H. Milla is editor of the Reputable Debt Settlement website – visit and see his best rated debt settlement company recommendation.

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Tags: debt management, debt relief, debt settlement, settling debts