Credit Card Settlements and Credit Scores
April 26, 2012 By Kathryn L. Harry & Associates, P.C. - Bankruptcy
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Credit card debt is the most common form of debt in America. In 2006, the U.S. Census Bureau estimated that there were 173 million credit card holders in the U.S. These 173 million held roughly 1.5 billion cards—an average of almost nine cards per person. The same data reported that in 2006, Americans “carried approximately $866 billion in credit card debt.”
All these numbers were before the credit card debt crises felt by many Americans during the 2008–2010 recession—the Huffington Post reports that credit defaults were expected to hit 10 percent in 2009. One way people attempt to avoid a credit card default is through a credit card settlement. A settlement is negotiated through a third-party company that works with your credit card company to potentially lower the balance of high outstanding debt. You cannot qualify for a settlement unless you are about three months late on payments.
By the time a person qualifies for a settlement, his credit score has already been affected. Settlement, however, will knock down a credit score by more points—FICO, a credit card analysis and settlement company, estimates that a score of 680 would drop 45 to 65 points for settlement. The higher the score, the bigger the drop. The best way to determine what settlement would do for you is to contact a certified credit counselor. A legitimate agency can be found through either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
If settlement doesn’t work for you, bankruptcy could be your next best option. If it seems that way, contact a dedicated Illinois bankruptcy attorney today.
AUTHOR: Kathryn L. Harry & Associates, P.C.
Copyright Kathryn L. Harry & Associates, P.C. - Bankruptcy
More information about Kathryn L. Harry & Associates, P.C. - Bankruptcy
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
By the time a person qualifies for a settlement, his credit score has already been affected. Settlement, however, will knock down a credit score by more points—FICO, a credit card analysis and settlement company, estimates that a score of 680 would drop 45 to 65 points for settlement. The higher the score, the bigger the drop. The best way to determine what settlement would do for you is to contact a certified credit counselor. A legitimate agency can be found through either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
If settlement doesn’t work for you, bankruptcy could be your next best option. If it seems that way, contact a dedicated Illinois bankruptcy attorney today.
AUTHOR: Kathryn L. Harry & Associates, P.C.
Copyright Kathryn L. Harry & Associates, P.C. - Bankruptcy
More information about Kathryn L. Harry & Associates, P.C. - Bankruptcy
View all articles published by Kathryn L. Harry & Associates, P.C. - Bankruptcy
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
