When dealing with any type debt negotiation plan, one of the first questions asked is always “Will this effect my credit score?” The short answer is yes. Anything that does not constitute paying your creditors the full amount in a determined time will most likely reflect negatively on your credit score.

Nevertheless, the complete answer to this question is much more complicated and one must analyze the reality of the situation above all. Anyone who is seriously considering debt settlement is most likely in a situation where they could possibly be making late payments, behind on payments, or unable to make minimum payments. In other words, they are individuals who are already facing possible credit score problems. These issues can affect your credit score in just the same way as joining a debt settlement plan, if not worse. The benefit of the debt settlement plan is that you are making positive progress toward eliminating your problem.

In this situation, one must prioritize. What sounds better: solving your financials problems, but having your credit score suffer or having your credit score stay the same and watching your debt grow exponentially? And to make matters worse, if you are already experiencing financial difficulties, the odds are that your credit score is going to take a hit no matter what. The important thing to analyze is what is your main goal? If for you, the most important thing is to reduce your debt and begin to manage your financial situation more, then you might just have to suck it up and realize that there may be consequences along the way that you don’t like, but that are necessary for you to reach your final goal. After all, let’s say that after two to three years you become debt free, but as a result your credit score is significantly lower than what you want. You will then have the financial independence to begin rebuilding your credit score, which can take 6 months to a year in an average case. Thus, you will have effectively eliminated your maintain problem and be on your way to controlling a secondary issue.

I guess my point is the following. Why are you worrying about secondary issues and ignoring what is most important?