Tired of creditors calling? Is It Better to Pay Off Debt or Settle It?

Date Posted: January 24, 2022
By: Magnolia Yrasuegui

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 to do so. 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 this will be seen by creditors as a negative point against you financially.

If paying off your debt is not an option, debt settlement or debt relief is an excellent next choice.

Accounts in good standing can stay in your credit report for ten years – these are debts paid on time. These positive marks on your credit report can help boost your credit standing, and it will help you get better rates when you apply for a loan. The opposite is true if you have unpaid debts, which will hurt your credit rating. It would be best to face this reality when you opt for a debt settlement.

If paying in full is not possible, talk to a debt settlement company to help you with this problem. The debt settlement company will negotiate with your lenders to pay for less than the amount you owe. A word of caution though, they will be asking for a fee, and it might be a substantial amount. You can work on this on your own to save on costs, but this will be a long and tedious process. 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 consider consolidating your debt. When you have successfully settled your debt, it will stay in your credit report for seven years from when your debt was settled. 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.

Need some help with your debts? We’re here for you!

Get Free Debt Assessment

Recent Articles

Some of the articles you can read to help manage your finances

Troubled and worried? Pay the debt and be set free! Here’s how
Troubled and worried? Pay the debt and be set free! Here’s how

We’ve discussed how you can pay the debt that you […]

Read more
Zero debt – is it achievable? Rejoice for it can be done!
Zero debt – is it achievable? Rejoice for it can be done!

Zero debt is not an impossible dream if you want […]

Read more
Lost if you need to pay off debt now or later? Settling is good!
Lost if you need to pay off debt now or later? Settling is good!

Do you need to pay off your debt or keep […]

Read more