 TITLE: Will Debt Relief Hurt My Credit Score? CONTENT: How Do Debt Relief Plans Affect Credit?\n---------------------------------------\nDebt relief can be good and bad for your credit—it all depends on which method you choose and how far behind you let your debt fall. Ultimately, if you miss payments and let accounts fall past due, your credit score is going to suffer. It's possible to have a lot of debt at one time and still have a good credit score, but the trick is to make sure you manage your repayment responsibly to keep your credit health in check.\nHere are a few ways each of the major debt relief options can affect your credit:\n*   **Debt settlement** is one of the more dangerous debt relief options when it comes to harming your credit score. Debt settlement companies typically ask customers to discontinue payment to creditors while they negotiate on your behalf. Payment history is the most important factor in your credit scores, and if you miss any debt payments, your credit score will take a dip.\n    Debt settlement companies are not chiefly concerned with your credit scores; they focus on lowering or eliminating what you owe. Be cautious when working with a debt settlement company and make sure to work with a reputable firm. You can check with your local consumer protection agency or state attorney general to find out if the company has had any complaints filed against it in the past. Also consider the full effect missing payments could have on your credit history and the tax implications that come with settling debt. Debt settlement should be one of your last options, only after you've tried remedying your debt with less harmful tactics, like debt management or consolidation, or one of the alternative methods mentioned below.\n*   **Debt management** is a great option for someone looking to relieve their debt woes without hurting their credit score. With this method of debt relief, your credit counselor works with your creditors to create a repayment plan that will work for you—and then you stick to it. As long as your repayment goes as planned—meaning you don't miss any payments—your credit score should remain unharmed. Refer to the list of credit counselors approved by the U.S. Justice Department when looking for a counselor in your area.\n*   **Debt consolidation** is a good option for finding some relief from creditors that shouldn't hurt your credit scores if you manage it responsibly. If you end up consolidating your debt with a new loan or credit card, chances are you'll incur a hard inquiry as a result of letting a new lender check your credit for your application. Hard inquiries can ding your credit scores, but the impact is typically small and short-lived. Also be sure to make all your payments on time, as payment history is the most important aspect of your credit scores; even one late or missed payment can bring your score down. And try not to apply for any new credit cards while you work to pay off your current debt.\n*   **Bankruptcy** will severely affect your credit scores and will remain a part of your credit history for seven to 10 years. It will also make obtaining credit in the future \\[difficult. If you're thinking about declaring bankruptcy, make sure to consider all other debt relief to see if your financial woes can be solved using another method.\nMost likely, if you're looking for debt relief options, your credit scores have already suffered in some way. But that doesn't mean it's too late to prevent further damage. Debt relief can be helpful for relieving stress, and also for limiting the lasting damage your credit history could endure if you fall significantly behind on your payments. END