How Credit Card Settlement Affects Your Score

Credit card settlement allows paying less than full debt but can hurt your credit score. It leaves a “settled” mark on your credit report.

Full repayment boosts your credit score, but settling means you couldn’t pay in full. This reflects negatively on your credit.

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A settled account can lower your credit score by 75-125 points. This depends on your credit history and the amount settled.

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Settlement stays on your credit report for up to 7 years, affecting future loan approvals and interest rates.

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To rebuild after settlement, pay bills on time, avoid new credit, and use a secured card to rebuild your credit history.

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Alternatives like debt consolidation, balance transfers, or credit counseling can help without damaging your credit score.

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