 TITLE: What Is Debt Settlement? CONTENT: Does Debt Settlement Affect Your Credit?\n----------------------------------------\nThe single biggest factor in your credit scores is your payment history. If you're a candidate for debt settlement, you may have already missed or made late payments, but if your payment history is good going into the debt settlement process, it won't be for long. A debt settlement company's instructions to withhold payments from your creditors (and instead make payments into a savings account) will certainly bring a rapid, steep drop in credit score if you haven't missed any payments, and it'll likely drag down your scores even if you've had a spotty payment history.\nIn addition, willful nonpayment of creditors over a span of months or years will likely lead some creditors to charge off your debts and sell them to collection agencies—events that lead to significant negative credit report entries. These entries stay on your credit report for seven years from the date of the initial delinquency that caused them.\nThe combination of credit score damage and negative credit report entries can significantly limit lenders' willingness to issue you loans or credit. END