1. Does checking if I qualify for debt relief hurt my credit?
Nope. Checking to see if your debt qualifies for relief does not impact your credit score. It’s considered a soft inquiry, not a hard credit pull.
2. Will settling my debt lower my credit score?
It can—temporarily.
When you settle a debt for less than what you owe, your credit report will note the account as “settled” or “paid for less than owed.” This can cause a short-term dip in your score because it signals to lenders that the full balance wasn’t repaid.
3. What if my debt is already delinquent?
If you’ve missed payments or your account is in collections, your credit has likely already been impacted. In this case, settling may not make things worse—and might actually help you start turning things around.
4. Does settling stop interest from growing?
Yes. Once a settlement is accepted and paid, it stops the debt from growing any further. That means no more accumulating interest or late fees.
🔔 Note: If you don’t make the settlement payments, the agreement can fall through—and interest, fees, and collection activity may continue. It's important to follow through to keep your agreement.
5. How long will a settled debt stay on my credit report?
A settled account typically remains on your credit report for seven years from the original delinquency date. Over time, its impact lessens—especially if you build a positive payment history afterward.
6. Is settling better than leaving the debt unpaid?
Yes. While “settled” isn’t as ideal as “paid in full,” unresolved debt is worse. Unpaid accounts can lead to lawsuits, wage garnishment, or further credit damage. Settling is a step toward resolution.
7. Can I rebuild my credit after debt relief?
Absolutely. Many people use debt relief as a fresh start. Once your debt is resolved, you can focus on rebuilding—through on-time payments, low credit utilization, and responsible financial habits.
8. What happens to my credit account after I settle?
Once you settle a debt, the account is typically closed—you won’t be able to use that credit line again. While this helps stop the debt from growing, it can have other effects on your credit score:
Reduced available credit: Closing an account can impact your credit utilization ratio, which may temporarily lower your score.
Account status: The account will be marked as “settled” or “paid for less than owed,” which tells future lenders the full balance wasn’t repaid.
Shorter credit history: If it was an older account, closing it could slightly shorten the average age of your credit accounts.
Still, settling and closing an account is often a better option than letting debt go unresolved—especially if you’re already behind. It gives you a clean break so you can move forward.