Creditnet News Story
Though consumers may consider debt settlement, it could hurt their credit score
Monday, March 1, 2010
By Linda McCarthy
Programs have people pay off less than they owe.
Consumers who have accepted credit card offers in the past may be in some trouble now if they have not made their payments.
In the face of high amounts of debt, consumers may wonder what options they may be able to tap into in order to pay off their credit cards. One thing they may consider is debt settlement.
According to website totaldebtrelief.net, debt settlement may be able to reduce what a person owes by about 50 percent. The website noted that it could take between 12 to 36 months for a debt settlement plan to work.
However, what the site does not make clear is the fact that debt settlement could hurt a person's credit score. Anytime a person does not pay a debt in full it is reflected in their credit report.
Furthermore, officials in a number of states - including Illinois, Montana and North Carolina - have all expressed concern with these programs. Attorney generals in these states have gotten complaints from consumers that the programs have actually left them further in debt.
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