How you make your payments on your credit lines accounts for 1/3 of your credit score. When you make your payment each month the creditor will mark your account “pays as agreed”. This gives you the highest rating. When you use a debt settlement company the credit agency will report the account as “paid off” but they will not report it as “paid off as agreed”. This will cause your score to decrease a little but not as much as if you chose not to handle the problem at all.

Filing bankruptcy automatically decreases your credit score by 350 points and remains on your record for a minimum of ten years. Debt settlement, depending on the amount of accounts, will only decrease your score a few points per account. This, at worst case scenario, can remain on your account for up to seven years. During those seven years you will be able to increase the score by continuing good repayment practices and eventually the marks from the settlement will be erased. The bankruptcy score buster will remain with you the entire length of the ten years.

When you use a debt assistance company the credit agencies, as well as future potential credit grantors, will acknowledge the effort you put into paying off your debts instead of liquidating them. The adverse effects of a debt consolidation are quite minimal to those of failure to pay or filing bankruptcy. It will be much easier to gain credit in the future with a debt settlement on your record compared to that of bankruptcy.

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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