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How Do I Repair My Credit After Debt Settlement Lowered My Credit Score? – Dominic

“Dear Steve,

In an agressive debt settlement program and plan to be out of debt in 12 months (already 3 months in). They have already settled one of my credit card accounts with two more to go. I’m paying in about $1800 per month to the escrow account. I just want to be debt free! It does seem to be working – but we shall see… Assuming it works, I worry about my credit score. I have some consumer credit cards that I’ve been using and paying off each month and am current on my car/rent/utility payments. I’m not sure what I can do NOW to improve my credit and what I can do post-settlement to restore my credit. I had an awesome score and was super responsible. But I lost to the credit game and couldn’t keep up in the end. It was this or bankruptcy. I need tips that I can do today to help with my future score and I AM responsible. I just had a series of bad knocks that maxed my cards out.

What are your opinions on credit repair services? I’m in a settlement program that will end in 9 months and it does look like I’ll be “in the free and clear” though my credit score took a huge hit from the process. Any advice on getting that back up to the 700 range I used to have?


Dear Dominic,

Credit repair services are a waste of money. The core of the issue is that playing the game to try to get accurate but negative information removed is problematic. First, if you remove negative but accurate information and then used the untrue credit report to apply for credit you have just committed credit fraud. Second, there is no telling when that removed information will simply reappear on your report.

Just because information is bad doesn’t mean it gets wiped off. It’s like a report card in school. If you got a D on a test it doesn’t vanish. To increase your GPA you get better grades moving forward.

READ  Credit Repair Boss Steals Nearly a Million Dollars from Best Buy

The same is true in the credit report game.

If you follow the suggestions in this article you’ll be fine and have a better score, the right way, in a relatively short period of time.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • So just to give an update on my progress so far. I have settled 2 cards so far.  1 card was 16K and was settled for 2k. The 2nd card was for 34k and was settled for 14K (still paying this off now – this was the card my mom was sued for!!)  Now on to my remaining cards. I have 5 with collection agencies now and waiting for the other 5 to get there also. I have about 40K left to settle.  First thing Monday morning I was served by Citi. I have a 10K card with them and they decided to sue although they were in the negotiation process with the lawfirm I’m using to settle my debts. Last payment was made on these cards in November 2010 and they are just now going to collections. My credit scores were between 680 – 700 at the start of this and now they are all in the 520s.  I can’t wait for this to be over so that I can SAVE and move forward.  Prior to this I never missed or was late on a payment. Looking forward to finally being DEBT FREE.  I will update again soon.

  • THank you so much! I am just starting the settlement process. My parents both started the process 3 months ago and my mom is already being sued so needless to say I’m nervous. We’re using a law firm but i man is this stressful. I’m just starting to get the phone calls since I’ve missed one payment.. But again thank you for your updates. I have $90k in debt im trying to settle and hope to knock it out within a year also. I can’t wait to be debt free!!!

  • OK – so this is a long overdue update. I am done with my settlement program. I did end up getting sued by one of the banks but I quickly settled it by taking a loan against my 401k. My credit scores are back up in the 750-800 range, and I am completely debt free and feel like while I did end up paying a ton, the settlement company did lead me through this process and seemed to have my interestes in mind when negotiating settlements.

    I think the trick to working with these debt settlement companies is to go agressive. I don’t know what would have happened had I not had the 401k to borrow against, however. Either way – the whole experience was pretty difficult with the collectors, etc. I am glad to have this behind me, and am loving my secured cards w/ rewards. Thanks for all your advice, Steve!


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