Debt settlement is a process which is initiated by the borrower once he fails to pay the extra amount that has accumulated over the time because of his inability to repay his debt. The borrower fails to make the monthly payments and this accumulates the money adding the unpaid monthly amount and interest on that amount to his credit.
Generally the borrower has two options at this time; he can either opt for bankruptcy or he can initiate a debt settlement process. The debt settlement process generally involves a third party which is often a company that settles the issue. Such a company initiates the negotiations with the bank and settles the credit debts . The borrower is generally asked to pay some of the outstanding amount and then he has to make a promise to pay the remaining amount.
The debt settlement affects the credit score of the borrower. The settlement is referred to the credit bureau and it is stated that the credit is settled but it is also mentioned that less than full amount is paid. This badly affects the borrower as his credit score goes to the negative.
You can always improve your credit score by selecting different options. You can improve the credit score by paying another loan on time and without any default. Whenever you payback a loan without default, your credit score always improves. This is a great way to improve the credit score.
There are many credit repair clinics available. These clinics are great help and they will repair your credit and sometimes they even offer an entirely new credit profile. You have to be aware of the fact that there are many such credit repair clinics or say companies that charge too much and they offer the credit repair services that you can do yourself.
So before selecting such clinic’s services, make sure that you make a proper credit settlement research and know that whether the problem is of great magnitude or is it just easily curable. There is also a lot of scam here so you have to watch that as well. Being careful and doing deep study is the only way out.
You can also add someone else’s credit to your credit to boost the credit score. This is generally the fastest and best way to improve the credit but it requires a very trusting credit holder. Someone who will agree to transfer his credit to your credit and this is generally difficult to find. If you can find such a person, you will have a credit boost very easily. If the person adds you in the list, then his credit history is shown on your credit list which will ultimately boost your credit score as well.