Does using a debt relief company hurt your credit? for how long?
Question:
Answer:
"Technically", just the act of using a company Debt Service Company does not hurt your debt rating. However if they "negotiate" a special payoff amount of say a credit card debt then, yes the "Charged Off" part of the debt will show up as such on your credit report. How long it stays on your credit report varies from State to State, with the average being about 7 years.
In the UK..oh dear God YES. Its on your record for 6 years. Talk to your creditors first and only go down the Debt Relief Company road as a last resort!!
It depends on whether the use of the debt relief or credit counseling company is itself documented on your credit report. If it is, lenders typically allow 6 months after the debt is fully discharged for your credit rating to improve.
I just have happened to listen to a guy talk about credit. He has written a book on auto financing, but he seems to know alot about what factors affect your credit. For more information, go to ...
It depends on how your debt is handled. If you "settle" (pay 40-5% of your balance immediately) and the creditor reports it as "settled" and "closed by credit grantor" then it will be negative and will be reported for 7 years.
However if you go into "Credit Counseling" and get a written agreement from your creditors to keep your accounts open once you have paid them off and to report no late payments then it will be more positive.
The problem is most of us get sucked into credit card debt too easily because that what the credit card companies want. And it is very difficult to get out once you are buried.
Good Luck
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