How does debt affect my credit score?
The amount of debt you have weighs heavily upon your credit score. Your "debt to credit" limit is approximately 30% of your Credit Score. When you reduce the amount of revolving debt you have, not only will your credit score increase, your interest rates will drop. According to the credit scoring formula, you should not use any more than 40% of the available credit limit per each credit account.
If your debt is mostly charge offs or collections accounts, your debt is destroying your credit score. Bad debt such as charge offs place a number 9 for each account on your credit report. The number 9 signifies that not only do you have a debt, but you are also not paying as you agreed in the credit contract. The only way to get a charge off removed from credit report is to pay off the debt.
The best way to get the number 9 removed is to have FH Financial settle the debt with the creditor. FH Financial will get the debt settled and get a Debt Settlement agreement with the creditor to show that the debt is paid in full with a $0 balance and have the number 9 removed from all three credit bureaus.
Back to FAQsHow will Debt Settlement affect my Credit Score?When you consolidate your debt, you will:
- Lower your monthly payment
- Save 40-60%
- Payoff in 36 months
Debts that qualify:
- Credit Cards
- Collection Agency Accounts
- Personal Loans
- Medical Bills
- Unsecured Debt
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Eliminate your DEBT by 40-60%
Client Savings
Kelly F
Kanas City, MO
Original Debt: $74,703
Settlement Payoff: $27,640
Percentage of Savings: 63%
Angel & Robert W.
Oceanside, CA
Original Debt: $17,506
Settlement Payoff: $12,206
Percentage of Savings: 70%
Joseph
Aspen, CO
Original Debt: $61,960
Settlement Payoff: $27,840
Percentage of Savings: 55%
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