The three major credit reporting services use a numerical range of between 300 to 800. According to John UYlzhelmer, president of consumer education at Credit.com, “A 700 used to be enough to nab the best rates, but now a consumer needs a FICO score of 750.” When the consumer decides to use a debt settlement company one of the issue discussed how this will affect the consumer’s credit score.  In the past, the higher your FICO (credit score) score the better risk you are to lenders.  This score has meant you might be able to get lower interest rates either on your secured or unsecured borrowings. 

Debt settlement is an alternative method of getting the consumer out of their unsecured debt burden.  It is a program what is intended for those consumers facing undue financial hardship caused by the loss of a job, death of a spouse or medical emergency. The debt settlement option which is available to consumers is sometimes considered the last resource before filing bankruptcy. 

However, if the consumer is seeking out a debt settlement program their FICO score’s have already dropped. The drop in score has been caused by late payment, over limit or high balances. In fact, paying off a card and keeping it inactive will not necessary hurt your credit score nor will it help your credit score.  Recent news articles have indicated that lenders are closing or reducing credit limits on inactive or low usage credit cards.  This is also having a negative affect on the consumer’s credit score. 

Whether you use a debt settlement program or you try on your pay down your debt yourself. So either way the consumer’s credit score will be changed over time. The good news is as your debts are negotiated your credit score will begin to improve again.