 TITLE: Debt Relief: An Essential Guide CONTENT: How Debt Relief Can Affect My Credit Score\n------------------------------------------\nDepending on which debt relief method you choose, it could have a minimal or significant impact on your credit score.\nFor example, with debt consolidation, applying for a new loan or credit card could have a small negative effect on your credit score. Also, if moving a balance from one credit card to another increases your credit utilization rate—the percentage of the card's credit limit you're using—it could drop your credit score more significantly until you can pay down the balance.\nWith credit counseling, you typically won't see any major negative effects with your credit score, because you're still paying your debts as agreed. However, closing your credit card accounts could affect your credit utilization rate and eventually shorten the length of your credit history.\nBecause your payment history is the most important factor in your FICO® Score, the credit score most often used by lenders, your credit can suffer considerably with debt settlement and bankruptcy. With debt settlement, you're encouraged to stop making payments, so delinquencies and collection accounts can add up quickly, and those negative items will remain on your credit report for seven years.\nA bankruptcy will also cause a significant drop in your credit score and will be part of your credit score calculation for up to 10 years. END