Credit card debt settlement can have a big impact on your credit score. Here's how — and why.
The perfect financial storm is brewing for many Americans amid today's unusual economic landscape. For starters, persistent inflation has caused the cost of consumer goods to rise exponentially, making it harder for people to afford necessities like rent, gas and groceries. And, the Fed rate hikes and pauses that occurred over the last few years have led interest rates to be elevated across the board, further adding to the pressure on many people's budgets.
How credit card forgiveness impacts your credit scoreIn addition to the damage that's caused by making delinquent payments, settled credit card accounts can remain on your credit report for up to seven years from the settlement date. So, while settling high-interest credit card debt helps resolve the outstanding balance, it can take time for your credit score to fully recover from the negative credit scoring impact of settlement.
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