Does settling credit card debt affect my credit score ? Currently paying on Student loan.......?

Question

Does settling credit card debt affect my credit score ? Currently paying on Student loan, monthy.
This would up my score, wouldn't ?

Answer 1

Yes - if you settle, it would be considered a demerit on your credit score. You can ask for them to renegotiate your interest rates, and that is not considered settling.

Answer 2

Karen, I may be wrong so don't do this without checking this out, but Student Loans are called 'Secured debts' while credit cards are called 'unsecured' debts. I think it would be a BIG MISTAKE to do what you are asking. You see, the credit card debt is easier to make 'go away' than the student loan debt. Credit card debt can be erased under chapter 7 bankruptcy if you had to, but student loan debt can only be dealt with under a chapter 13 bankruptcy which just freezes the debt for a certain amount of years to give you relief. Chapter 7 ELIMINATES the debt permanently. When they call, tell them you will send what you can ($20 per month or so) Eventually they will offer to settle for much less than the 12 K. If you're really nervous about it and have a family member that can loan you $4,000, offer it to the credit card folks to eliminate the debt and see what they say. They won't take you to court because they know you are in school and have no money to 'garnish'. Just wait.

Answer 3

Yes, what happens is when you settle, it's like filinf for bankruptcy. But a little lesser. It will only affect your credit report for seven years vice 10 years for bankrupcty.

Answer 4

Yes it will make your numbers go up! Once you pay something off, make sure they take it off your credit and stay on them til they do! Good for you!

Answer 5

Any payment of debt reduces your debt ratio and improves your borrowing outlook.

Here is some info that may help.