Could Debt Settlement Ruin Your Credit Rating? Know What To Do.

July 13, 2010 - PRLog -- In recent times, companies have become more and more adept at making sure that a person's credit remains unharmed when settling his or liabilities.

Aurora Lillo Editor of the "Best Debt Settlement Companies" website -- http://www.BestDebtSettlementCompanies.org -- pointed out;


“...Debt settlement, as a reader of this article probably knows, is the process of requesting that a creditor reduce the amount of debt that one owes because he or she is unable to pay. A creditor will typically report such a request, if honored, to the credit score companies as "settled." This is considered very negatively into a future credit report. However, if one is willing to do some work, this negative flag can be prevented, or the positives for a credit score of settlement can outweigh the negatives...”

Typically, when settling his or her responsibilities, a consumer will hire a company that has expertise in this area. This company will act as many different things for the consumer throughout the process and is the best way to settle debt. Therefore, the author will assume that anybody reading this article has hired such a company from this point forward.

One thing that one in this process needs to know is that the largest portion of a person's credit score is calculated based on the debt to income ratio. Lower debt means a higher credit score. If a person is able to get his or her debt settlement agency to reduce his or her debt by enough, regardless of what shows up on the credit report, this alone may actually increase his or her credit score, or at least counterbalance the negatives.

“...Another way to increase, rather than decrease, one's credit score is with the variety of negotiation tactics that many companies have at their disposal. Settlement companies, due to their years of being in the business and great experience, frequently have contacts within credit card agencies, who can remove debt without reporting to the credit agencies. Similarly, these companies also know how to negotiate. For example, a common settlement negotiation tactic is to tell a creditor that their client has a certain amount of money to spend and no more. They will tell the creditor that if it is willing to put a positive mark on their client's record, that creditor will receive more money. This tactic frequently works to actually improve a person's credit, regardless of how much of the obligation is settled...” added A. Lillo.

Debt settlement can, and frequently does, improve a person's credit, as long as it is done in an intelligent way.

Further Information By Visiting; http://www.BestDebtSettlementCompanies.org