Unfortunately, debt settlement has bad impact on your credit score. It is actually one of the worst debt relief solutions. So, before choosing this option you should be aware about the following negative points:
- You are required to avoid regular payments to your creditors. This negatively influences your payment history.
- According to a debt settlement program you have, your account can be charged off or defaulted. It can also be sent to collection companies.
- A settled debt greater than $600 in an amount is considered as a taxable income, so you will have to pay for it as well.
- When you settle your debt, you will have your accounts remarked as “repaid by settlement”. This will characterize you as less reliable client for lending companies.
To understand how Personal Money Service deals with such situations read the following information.