If a debt relief company tells you that you can eliminate your unsecured debt while not affecting your credit score they are being untruthful and probably not worth doing business with. The truth is that when you eliminate your debt through a debt settlement it will negatively impact your credit score but not nearly as bad as bankruptcy. Consumers however can have a major impact on exactly how far your credit score will be lowered. If your follow the steps in this article then it is possible to eliminate up to 70% of your unsecured debt while having it only minimally affect your credit score.

When you hire a debt company, chances are that you will not have enough cash to pay a settlement in one lump sum. For those that cannot afford to pay upfront for the debt settlement, you will be paying into an escrow account until you build up enough of a balance to satisfy the settlement amount. During the time that you are paying into this escrow account, your creditors will still expect you to pay the monthly payment. Most debt settlement companies will tell you to simply ignore your payments. This however will cause your credit score to fall lower therefore if you can afford to pay the minimum monthly payment it would be prudent to do so.

After you have built up enough of a balance in your escrow account through the debt company your settlement will be paid off and your account will be closed. Make sure that your debt settlement company gives you an affidavit clarifying that your balance has been satisfied though a debt settlement process. If you do not do this you are running the risk that your creditor will pass the rest of your balance off to another collection agency. Most debt settlement companies do this automatically however it is critical to ensure that they do this or you could really be out of luck.