Does consolidating debt ruin your credit

Recent credit activity is one of the most important parts of your credit report you’ll need to rebuild.Settling Debt for Less Than You Owe Settling your credit card debt for less than you owe requires you to have missed payments.I have worked with people who, after completing settlements, have been able to get Federal Housing Administration underwriting on a home loan, funding for student loans and new auto financing much earlier than would have been the case had they filed chapter 13 bankruptcy, or enrolled with a credit counseling agency.A key factor for bouncing back from settling debts and accessing new credit comes from a healthier debt-to-income ratio.Closing active credit accounts can have a negative impact on your score.While enrolled in a credit counseling program, it is generally very tough to get financing of virtually any nature in the first 12 to 24 months.But once you achieve zero balance reporting, your credit score can begin to improve.

Chapter 7 Bankruptcy Chapter 7 bankruptcy stays on the public record section of your credit report for 10 years.

Your credit report and credit score will heal and bounce back over time, and you may even be surprised by how quickly your financial future looks bright again.

First Things First: Debt Is the Priority If you’re considering debt relief options, you’re not in a good position to spend, or to be seeking out new credit products now, or for a couple of years to come.

The three most legitimate debt relief intervention options do indeed impact your credit report and/or credit score.

Each method will hurt your ability to get new loans, or certain types of loans, for the near future. Your credit score should come second to your focus on getting out of debt right now.

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