Your credit report matters — a lot. When your report looks good, doors open: new homes, new cars, and credit cards with great perks come within reach. But when negatives like debt settlements show up, you might find yourself watching the calendar, waiting for them to disappear. If you’ve settled a debt for less than the full amount owed, you’re probably wondering how long this financial decision will affect your credit score. Here’s what you need to know about debt settlement and your credit report. Debt Settlement Typically Remains on Your Credit Report for Seven Years The short answer: a debt settlement stays on your credit report for seven years from the date of the first missed payment that led to the debt becoming delinquent. This seven-year timeframe applies to most negative items on your credit report, including debt settlements. The clock starts ticking from the date of your first missed payment, not from when you settled the debt. This means if you missed payments for a year before settling, you’d still have six years left before the settlement drops off your report. Your creditor will report the debt as “settled” or “settled for less than the full amount” to […]
