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Exposed: The Truth About How National Debt Relief Impacts Your Credit Score

Is National Debt Relief bad for your credit?

If you're struggling with debt, one of the options available to you is National Debt Relief. This company specializes in negotiating debt settlements for borrowers with unsecured debt balances, such as credit card bills, personal loans, and private student loans. However, many people wonder whether using National Debt Relief is a good idea when it comes to their credit score. In this article, we'll take a closer look at how National Debt Relief affects your credit score and explore some of the alternatives available.

Before we dive into the details, let's first define what a credit score is and how it's calculated. A credit score is a number that lenders use to determine how risky it is to lend you money. The three major credit bureaus, Experian, Equifax, and TransUnion, each have their own credit scoring models. However, the most commonly used credit scoring model is the FICO score, which ranges from 300 to 850. The higher your credit score, the more likely you are to be approved for credit at a lower interest rate.

Now that we know what a credit score is, let's explore how National Debt Relief affects it. Using National Debt Relief can have a negative impact on your credit score, but the degree of impact depends on several factors. According to Experian, debt settlement, the service National Debt Relief offers, can be dangerous for credit scores. Debt settlement involves negotiating with creditors to pay off your debt for less than what you owe. This can result in missed payments and forgiven debt, both of which can harm your credit score. However, there are other debt relief options to explore before considering debt settlement, such as debt management plans, debt consolidation, and bankruptcy.

Now that we've established the basics of credit scores and how National Debt Relief can affect them, let's take a closer look at National Debt Relief itself. In the next section, we'll review the company's reputation and services.

How National Debt Relief Affects Your Credit Score

National Debt Relief is a debt settlement company that negotiates with creditors to reduce consumers' debt amounts. While the goal of National Debt Relief is to help you get out of debt, it can have a negative impact on your credit score. In this section, we'll take a closer look at how National Debt Relief affects your credit score, and compare it to other debt relief options.

How Debt Relief Can Affect Credit Scores

According to Experian, there are several ways that debt relief can affect credit scores. The impact on your credit score depends on which method is used. Debt settlement, the service offered by National Debt Relief, can be dangerous for credit scores. Debt settlement involves negotiating with creditors to pay off your debt for less than what you owe. This can result in missed payments and forgiven debt, both of which can harm your credit score.

On the other hand, debt management is a good option for relief without harming credit. Debt management plans involve working with a credit counseling agency to create a plan to pay off your debts over time. This can help you avoid missed payments and other negative credit events.

Debt consolidation may not hurt credit scores if managed responsibly. Debt consolidation involves taking out a loan to pay off multiple debts. If you make your payments on time and don't run up more debt, your credit score may actually improve.

Finally, bankruptcy is a last resort that severely affects credit scores. Bankruptcy can stay on your credit report for up to 10 years and can make it difficult to get approved for credit in the future.

Understanding Your Credit Score

Before we dive deeper into the impact of National Debt Relief on your credit score, it's important to understand how credit scores work. Credit scores are calculated based on several factors, including your payment history, amounts owed, length of credit history, new credit, and types of credit used. Payment history and amounts owed are the two most important factors that affect your credit score.

Your payment history accounts for 35% of your credit score. This takes into account whether you've paid your bills on time, and whether you've missed any payments. The more missed payments you have, the lower your credit score will be.

Amounts owed make up 30% of your credit score. This takes into account how much you owe on your credit accounts, and how much of your available credit you're using. The more debt you have, and the more of your available credit you're using, the lower your credit score will be.

The Impact of National Debt Relief on Your Credit Score

Now that we understand how credit scores are calculated and how debt relief can affect them, let's take a closer look at how National Debt Relief specifically can impact your credit score. According to National Debt Relief's website, using their service may negatively impact your credit score. The website explains that missed or late payments can be reported to credit bureaus, which can lower your credit score.

However, National Debt Relief also points out that using their service can actually help improve your credit score in the long run. By paying off your debts, you can improve your payment history and amounts owed, two of the most important factors that affect your credit score.

In the next section, we'll take a closer look at National Debt Relief's reputation and services.

National Debt Relief's Reputation and Services

Now that we understand how National Debt Relief can impact your credit score, let's take a closer look at the company itself. In this section, we'll review National Debt Relief's reputation and services.

Reputation

National Debt Relief has a good reputation with customers and gets an A+ rating from the Better Business Bureau, according to FinanceBuzz. The company has been in business for over a decade and has helped thousands of people get out of debt.

Services

National Debt Relief specializes in negotiating debt settlements for borrowers with unsecured debt balances, such as credit card bills, personal loans, and private student loans. However, the company cannot help with secured debt or federal student loans, according to NerdWallet.

To qualify for National Debt Relief's services, you must have at least $7,500 in unsecured debt, according to NerdWallet. The company charges a fee that's 15% to 25% of the original debt amount, but it's only charged at the end of the process if the company is able to get you a settlement, according to FinanceBuzz.

National Debt Relief offers a free consultation to determine whether their services are right for you. If you decide to move forward, the company will work with you to create a plan to pay off your debts over time. They'll also negotiate with your creditors to settle your debts for less than what you owe.

Alternatives to National Debt Relief

If you're considering National Debt Relief, it's important to explore all of your debt relief options. Debt management plans, debt consolidation, and bankruptcy are all alternatives to debt settlement.

Debt management plans involve working with a credit counseling agency to create a plan to pay off your debts over time. This can help you avoid missed payments and other negative credit events, according to Experian.

Debt consolidation involves taking out a loan to pay off multiple debts. If you make your payments on time and don't run up more debt, your credit score may actually improve, according to Experian.

Bankruptcy is a last resort that severely affects credit scores, according to Experian. Bankruptcy can stay on your credit report for up to 10 years and can make it difficult to get approved for credit in the future.

In the next section, we'll take a closer look at the pros and cons of using National Debt Relief.

Pros and Cons of Using National Debt Relief

Now that we've reviewed how National Debt Relief can impact your credit score and its reputation and services, let's take a closer look at the pros and cons of using the company.

Pros

  • National Debt Relief can negotiate with your creditors to settle your debts for less than what you owe.
  • The company has a good reputation with customers and gets an A+ rating from the Better Business Bureau.
  • National Debt Relief offers a free consultation to determine whether their services are right for you.
  • Using National Debt Relief can help you get out of debt and improve your credit score in the long run.

Cons

  • National Debt Relief charges a fee that's 15% to 25% of the original debt amount, which can add up quickly.
  • The debt settlement process can take two to four years to complete, which means you'll be dealing with missed payments and delinquent accounts for an extended period of time.
  • Using National Debt Relief can have a negative impact on your credit score, particularly if you have missed or late payments during the debt settlement process.
  • National Debt Relief cannot help with secured debt or federal student loans.

Is National Debt Relief Right for You?

Whether National Debt Relief is right for you depends on your individual financial situation. If you have significant unsecured debt and are struggling to make your payments, National Debt Relief may be a good option for you. However, if you have secured debt or federal student loans, or if you're not comfortable with the debt settlement process, you may want to explore other debt relief options.

Before making a decision, it's important to do your research and consult with a financial advisor. You should also consider the potential impact on your credit score and whether you're comfortable with the fees charged by National Debt Relief. By weighing the pros and cons and exploring all of your debt relief options, you can make an informed decision that's right for you.

Wrapping Up

Now that we've explored how National Debt Relief impacts your credit score, reviewed the company's reputation and services, and weighed the pros and cons of using the company, it's up to you to decide whether National Debt Relief is right for you.

Remember, debt relief is just one tool in your financial toolbox. If you're struggling with debt, it's important to explore all of your options and consult with a financial advisor. By taking control of your finances and making informed decisions, you can achieve financial freedom and peace of mind.

If you're interested in learning more about debt relief, personal finance, and other financial topics, be sure to check out our other great content. We're here to help you navigate the complex world of personal finance and achieve your financial goals.

Questions and Answers

Question: Who qualifies for National Debt Relief's services?

Answer: Anyone with at least $7,500 in unsecured debt can qualify.

Question: What fees does National Debt Relief charge?

Answer: They charge a fee of 15% to 25% of the original debt amount.

Question: How long does the debt settlement process take?

Answer: It can take two to four years to complete.

Question: What impact does National Debt Relief have on credit scores?

Answer: It can have a negative impact, particularly if payments are missed.

Question: How does National Debt Relief compare to other debt relief options?

Answer: Debt management plans and debt consolidation are alternatives.

Question: What if I have secured debt or federal student loans?

Answer: National Debt Relief cannot help with secured debt or federal student loans.

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