Pay Off Debt or Settle It? Which Is better?

Date Posted: January 24, 2022
By: Maggie Marques

Should you pay off debt or settle it? To pay your debt in full or opt for a debt settlement. Which is the better option? Paying in full is always the better option if you have the money. Being debt-free will not only be good for your credit score. But it will also give you a good night’s rest, knowing that you do not have creditors who will be calling you to follow up on your payment.

Going for a debt settlement is the lesser evil than filing for bankruptcy. However, your credit report will still reflect that you settled a debt – and creditors will see this as a negative point against you financially.

Pay Off Debt or Settle It?

If paying off your debt is not an option, debt settlement or relief is an excellent next choice. Accounts in good standing can stay on your credit report for ten years – th se are debts paid on time. These positive marks on your credit report can help boost your credit standing and help you get better rates when you apply for a loan. The opposite is true if you have unpaid debts,  urting your credit rating. It would be best to face this reality when you opt for a debt settlement.

When considering to pay off debt or settle it, talking to a professional can help. If paying in full is impossible, talk to a debt settlement company to  help you with this problem. The debt settlement company will negotiate with your lenders to settle for less than you owe. A word of caution, though, they will be asking for a fee, which mig t be a substantial amount.

You can work on this independently to save on costs, but this proces  will be long and tedious. So if you don’t have the time and the capacity to do it yourself, hiring a third party to work for you may be a better alternative.

Debt settlement is better than filing for bankruptcy, but you may always want to consid r consolidating your debt. When you have successfully settled your debt, it will stay on your credit report for seven year  from when it was fixed. This will be a warning sign for future lenders that you might be a credit risk, and they, in turn, will give you a higher rate compared to somebody who has a credit history of always paying on time.

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