Critics of debt settlement take a lot of pleasure in pointing out that the negative impact of settlement on the credit history or the credit report of the individual is as bad as that of bankruptcy. Well, it seems true.
However, there is a huge difference. As you would know, you have two options when you are trying to get a tattoo on your body. Either you can go in for the traditional method that will make the mark prominent.
Bankruptcy is the permanent tattoo
Or, you have the option of going in for a stick on tattoo that can be removed whenever you want. Bankruptcy is the permanent tattoo. Debt settlement is the temporary one. It is possible to reduce the impact of settlement on your credit score.
On the other hand bankruptcy means that you will have to kiss the idea of a high credit score goodbye. It will be impossible.
How can you reduce the impact? For starters, regular repayment of the settlement amount in a prompt manner will put you in a position where your credit score will automatically improve.
When you go in for a settlement deal, the lenders shall indicate that the debt has been settled and the same shall reflect in your credit report. This will automatically reduce your score.
Manage your debt repayments
When you make regular repayments, the credit score will automatically improve because the credit bureau will see prompt repayment of your obligations. Secondly, you can manage your debt repayments and go in for a secured credit card simultaneously. You do not need a high score go in for a secured credit card.
Once you have this financial tool in your hand, you just have to continue using the secured credit card and avoid all forms of unsecured debt to the maximum extent possible.
When the credit card issuer and other unsecured lenders notice that you are already on the job of credit repair, it will definitely improve your credibility. The credit card issuer from whom you obtained secured credit card will not hesitate offering an unsecured credit card once you have proved your reputation.
In such a scenario, you actually have the option of rendering the credit report and the credit history irrelevant. Thirdly, you can employ the services of professional credit repair service providers.
You just have to follow the tips and hints provided by these experts and you will find your credit score improving. Even if you bring your score back to normal by the time you end the settlement deal and bring your credit card debt down to zero, you will be a fantastic position to launch yourself there on and improve your score as quickly as possible.