Question

Sample credit reports when you enter a debt settlement program and what it looks like after you finish represent:

a) Improved credit scores
b) Decreased credit utilization
c) Temporary credit freeze
d) Negative impact on credit

Answer 1

Entering a debt settlement program can have both positive and negative effects on your credit scores.

Step-by-step explanation:

Entering a debt settlement program can have both positive and negative impacts on your credit.

Initially, when you enter a debt settlement program, your credit scores may be negatively affected. This is because settling a debt for less than the full amount owed is considered a negative event by lenders and can lower your credit scores.

However, once you finish the debt settlement program, you may see some improvement in your credit scores over time. This is because you have successfully resolved your debts and are now in a better position to manage your finances. Additionally, as you pay off your settled debts, your credit utilization ratio will improve, which can also help boost your credit scores.