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Debt Settlement Programs: How To Eliminate Debt While Maintaining Your Credit Score

With bankruptcies slowly becoming a thing of the past, Americans are now increasingly comfortable with debt settlement programs as a way to get their financial houses in order.

These have proven to be immensely beneficial to a large number of Americans, allowing them to pay off reduced amounts owed on their card, and sometimes even over an extended period of time. In essence, this means that they can pay comfortably thanks to the agreements made with the card companies.

But your credit score will suffer from this, although it certainly won’t be completely ruined as it would be in the case of bankruptcy. Settlements are also known as debt settlement programs and people have found this to be a very comfortable way of dealing with card companies who these days are now more than willing to listen to creditors when it comes to payments.

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When you enter into an agreement to eliminate debt, your score will be affected. But as you continue to make reduced payments, you will find that the score is stable and there is little effect on it. You won’t be badly damaged, but a lot will depend on whether your settlement company can negotiate correctly with the card company.

A perfect deal would allow your score to remain as it is without any effect. This, of course, provided you make even the reduced payments on time, which is often the case. Missing a payment after an agreement is a sure path to bankruptcy.

Because of debt settlement programs, many Americans now find that they are much better off financially and are even managing to set aside a little money for the future. Spending has also shown a slight increase, although today most are shy about using their plastic given their past experiences.

With the US economy slowly recovering and the recession a thing of the past, there is more confidence among Americans. It’s also worth remembering that when it comes to paying off debt with card companies, it’s about getting back to your previous financial state and credit score isn’t really the point.