Frequently Asked Questions About Debt Relief
How does debt relief affect my credit score?
The impact on your credit score varies by program. Credit counseling often has a neutral to positive effect. Debt settlement can negatively impact your score in the short term because you stop paying creditors directly, but scores often recover and improve as debts are settled and resolved. Debt consolidation loans can improve your score if you make consistent, on-time payments.
Are debt relief programs legitimate?
Yes, many legitimate debt relief companies exist to help consumers. However, it's crucial to do your research. Legitimate companies are transparent about their fees, have good reviews, and are often accredited. Avoid any company that guarantees they can remove all your debt or asks for large upfront fees before providing any service.
Which type of debt can be included?
Typically, unsecured debts like credit card bills, medical bills, and personal loans can be included in debt relief programs. Secured debts, such as mortgages or auto loans, are usually not eligible because they are backed by collateral.
