Does debt settlement affect buying a home? Debt settlement will affect your credit score and give you a more challenging time to bargain for a better deal, but it doesn’t mean you can’t buy a house forever.
If you want to buy that dream house but do not have any other option but to apply for a debt settlement, you better do it now and start working on rebuilding your credit score as soon as possible.
How to apply for a debt settlement? First, we need to understand debt settlement. Debt settlement, debt adjustment, or debt relief means you will pay your creditor less than you owe them. You can apply for a debt settlement on your own or hire a debt settlement company to help you do it. The rule of thumb is that the more money you have on hand to settle your debt, the better the chances of a settlement, and the sooner you can improve your credit score.
What do you do after a debt settlement? Make sure that you have a signed copy of the settlement agreement. This document is proof that you do not owe your creditor anymore. Sometimes, your debt will still reflect on your credit history, and the settlement agreement copy that you have will show that you don’t owe them anymore. Check your credit report to make sure that your settlement is already reflected.
Now that you have lesser debt under your name, you must pay off all the other debts. Repaying is part of the process of building back your credit score. Also, you should not miss payments anymore. Your payment history forms a sizeable chunk in determining your credit score. It is also wise to look at your credit utilization rate. Even if you pay your bills on time and maintain a high credit card balance, it will still hurt your credit rating.
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