What Effect Will Debt Negotiation Have On My Credit Report In Kentucky?
Debt negotiation or settlement can have a negative impact on your credit score, at least temporarily. There are options that allow a person to negotiate their debt and have no negative impact on their credit score.
What is Debt Negotiation Or Settlement In Kentucky?
Debt settlement, also known as debt arbitration, debt negotiation or credit settlement, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full.
Creditors often accept reduced balances in a final payment and this is called full and final settlement but with debt settlement the reduced amount can be spread over an agreed term.
How Will My Credit Score Be Impacted By Debt Settlement?
Once a settlement is reached, at that point your credit reports must be updated to show a $0 balance and the creditor cannot attempt to collect the debt any longer.
It’s important to keep in mind that when you negotiate or settle for an amount less than you owe, this can negatively impact your credit. Credit reports will show evidence of debt settlements and the associated FICO scores (credit scores) will be lowered temporarily as a result. However, settling your debt shows you have taken accountability for your debt and repaid at least a portion of that debt. Once debtors settle their accounts their credit scores will begin to go back up again.
Can My Debt Be Settled Without Affecting My Credit Score?
Yes, your debt can be negotiated without hurting your credit score. It is important to note, that if a “paid in full” letter is obtained from the creditor, the debtor’s credit report should show no sign of a debt settlement and there will be no negative impact on your credit score.An experienced debt negotiation attorney can help negotiate your debt to get a paid in full letter to protect your credit score.
Debt Negotiation And Settlement Lawyer In Kentucky
If you have more questions about debt negotiation credit report effects contact our office. The lawyers at Hurst & Hurst Law can help you get the best deal possible when you want to settle your debt. Our attorneys are experienced with debt negotiation and can hold creditors accountable. If you are considering debt negotiation or bankruptcy contact an attorney at Hurst & Hurst Law at (859) 209-2101.