Many people wonder how debt settlements effect their credit report and this is a valid concern. The two things that will affect your credit score the most are late payments and a high debt to income ratio. Chances are if you are considering credit card debt settlement, you probably have both. If you already have late payments and large debt, your credit has probably already been affected negatively.
If you have made all your payments on time and when I say on time, I mean not more than 30 days past the due date (that is when most companies report you as late to the credit bureau) and you are able to make a 2 % payment, credit counseling is probably going to make a better debt relief option for you. Credit counseling has very little impact on your credit and if that is where you are now, you should protect that. It takes time to rebuild your credit. It will take more time than the 2 years you may be saving by using debt settlement over credit counseling.
If you feel there is already more than a small amount of damage to your credit report, you may select debt settlement as your debt relief option. This will allow you to get the debt paid off quickly and allow you to begin rebuilding your credit sooner. There are many debt relief services that offer both debt settlement and credit counseling because there is a need for more than one type of debt management.
The best thing about a debt management service that offers multiple options is they will evaluate your debt, as well as your ability to repay the debt and help you select a debt relief option that will best suit your needs. You are not obligated to take any of these options. Not only will they explain how the different programs work, but they will discuss each programs impact on your credit score. The bottom line here is before you can improve your credit score, you have to get rid of the debt.
Debt can be crippling and can have a tremendous impact on all areas of your life. Many people delay making a plan for getting out of debt because they just don't know where to start. The internet has a wealth of information on debt and debt relief. Forums are a great source of impartial information. Once you begin looking for debt relief answers, your path will become clearer.