 TITLE: How Do Debt Relief Companies Work? CONTENT: How Does Debt Settlement Affect Your Credit Scores?\n---------------------------------------------------\nMost of the potential negative credit report entries associated with debt settlement—settled accounts, late or missed payments, transfer of accounts to collections agencies—can have significant negative effects on your credit scores. The severity of their impact will depend on the nature and number of negative entries on your credit report, and how high your score was before the negative events appeared. The negative score impact will be greatest when the entries are new, and their effect on your credit score likely will diminish over the course of years, even though some of the entries will stay on your credit report as long as seven years.\nEven worse, if debt settlement is unsuccessful, you may have no recourse but bankruptcy. That's probably the most severe negative event that can appear on a credit report, and depending on the type of bankruptcy settlement you file, it can remain on your credit report for seven or 10 years. Bankruptcy has a strong negative effect on credit scores. Like other negative credit events, a bankruptcy's impact on credit scores lessens over the span of years, but many lenders won't even consider lending to an individual with a bankruptcy on their credit report. END