(Spoiler: Freedom Debt Relief might hurt before it helps—but here’s what you really need to know.)
Imagine this: You’re drowning in credit card bills. The phone won’t stop ringing. Your minimum payments don’t budge the balance. And then—bam!—an ad pops up promising to slash your debt by half through a program like Freedom Debt Relief.
Sounds like a lifeline, right?
But then you pause and wonder:
“Is this going to wreck my credit score?” Let’s break this down like a best friend would—no judgment, just the real deal.
📍 Why Listen to Me?
I’ve been helping people navigate debt since 1994—and I’ve seen what works, what fails, and what makes people regret their decisions most.
I’m not here to scare you or sell you anything. I just want you to walk away smarter.
🎯 First, What Does Freedom Debt Relief Actually Do?
Freedom Debt Relief (FDR) is a debt settlement company. That means:
- You stop paying your creditors.
- Instead, you make monthly payments into a separate savings account.
- When there’s enough money, FDR negotiates with your creditors to settle your debts for less than you owe.
Important: They only work with unsecured debts like credit cards—not student loans or secured debts like a car loan.
💥 So, Will Freedom Debt Relief Damage Your Credit?
Yes. At first. Possibly a lot.
Here’s why:
- You intentionally stop making payments, which leads to late fees, penalties, and collections.
- Your credit score can drop significantly in the early stages of the program.
- Accounts may be marked as “settled for less than owed,” which can stay on your credit report for up to 7 years.
But—and this is big—if you’re already behind on payments, your credit is probably already taking hits.
So FDR’s impact might be more of a continuation than a catastrophe.
⏳ Long-Term Credit Impact: The Honest Truth
It’s not all doom and gloom.
Here’s what people often miss:
- Settling your debt can stop the bleeding.
- It reduces your total debt, which can help your debt-to-income ratio.
- After completing the program, many people see their scores start to recover within 1–2 years—especially if they avoid new late payments and rebuild responsibly.
Plus, Freedom Debt Relief doesn’t force you into bankruptcy, which can also hurt your credit (but often less than people think—more on that here).
❌ The #1 Mistake People Make With Debt Help
They choose a program before they fully understand the problem.
They’re sold a solution before they’ve even had a diagnosis.
That’s like being wheeled into an emergency room with a broken leg and being given treatment for a stomach ache because that’s what they specialize in. Yikes.
🤝 Some of My Observations Before You Go
Maybe. Every situation is different.
But before you commit, ask yourself:
- Are you current on your debts? (Then FDR might do more harm than good.)
- Are you already falling behind? (Then FDR might actually help you regain control.)
- Do you want a plan built around your life—not a cookie-cutter solution?
Here’s the thing I’ve seen time and time again…
The biggest drawback with large debt relief providers like Freedom Debt Relief isn’t necessarily the process—it’s the mindset.
These companies are really good at signing people up. That’s their strength. But in my opinion, the concern is that not everyone gets evaluated for the best possible solution based on their unique circumstances.
If you sell debt settlement services, it’s only human nature that debt settlement becomes the go-to recommendation.
Same goes for credit counselors—they tend to love debt management plans, because that’s the main product they offer.
And while we’re being honest… the criticism against Freedom Debt Relief can be intense.
Sometimes that’s due to high-pressure tactics by professional salespeople with polished scripts and honed closing skills—no question there.
But more often than not, I’ve seen people jump into the program—or any program—without fully reading the client agreement or understanding what they legally agreed to purchase.
That’s not a Freedom Debt Relief problem—that’s a “slow down and read the fine print” problem. When you’re panicked and desperate, it’s easy to sign without asking, “Wait… what exactly am I agreeing to here?”
One of my personal observations is that here on the site, when consumers have submitted angry complaints, Freedom Debt Relief has always done a professional job in addressing the issue. In my experience, I think their customer service in those situations has been fantastic. You can read past posts here that show that in the comments.
That said, one major limitation of these big, highly-structured programs is this: not everyone needs to settle all their debts. Sometimes someone just needs a little of this, a little of that, or a more drawn-out plan that fits their real-life situation. And big process-driven organizations just aren’t built for that level of customization.
👉 That’s why I always recommend talking to Damon Day at DamonDay.com. He’s the only debt coach I trust. He’ll help you explore all your options—settlement, bankruptcy, credit counseling—and figure out what’s best for you, not what lines someone else’s pockets.
📝 Bonus Resource: Before you commit to any debt relief program, check out my Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign on the Line. It’s packed with smart questions to ask—and red flags to watch for.
🔥 FAQ: Real Questions People Ask Google About Freedom Debt Relief
Will Freedom Debt Relief ruin my credit forever?
No. It can cause a significant drop early on, but with time and smart rebuilding, your credit can recover—often within 1–3 years.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
Is it better to use Freedom Debt Relief or file bankruptcy?
It depends. Studies show people who file bankruptcy often do better financially than those who don’t. (Source)
Can you get sued while in Freedom Debt Relief?
Yes. Creditors can still sue you for unpaid debt while you’re in the program. FDR may help settle those debts, but lawsuits are a risk.
Does Freedom Debt Relief hurt your credit worse than debt consolidation?
Typically, yes. Debt consolidation loans keep accounts current. Debt settlement involves missed payments and “settled” notations.
📣 Before You Go…
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Have you ever tried debt settlement? Or wondered if it’s right for you? Let’s talk.
You’re not just someone in debt—you’re someone in control of your next move.
You’re asking questions. You’re looking before you leap. And that already puts you ahead of most.
