Upon enrolling, our Negotiation Team will contact your creditors and begin the settlement process in an effort to resolve your debts for less than what is currently owed. Below are some additional items you should be aware of as you begin your journey in becoming debt free.
In the First Few Months
You will receive a Welcome Call
✔ Your Client Success team will be your point of contact throughout your program. You will hear from them as soon as you enroll to complete your welcome call. This will confirm your information, and make sure you have a good understanding of how the program works.
You will receive a Welcome Package
✔ This will come via email shortly after your enrollment and contain important program information including an authorization to communicate form that we request you send back to us, and frequently asked questions. Please make sure to complete and return your authorization form to us, by email or fax.
You will receive Progress Update Calls
✔ We will contact you on a monthly basis in the beginning of the program just to check on you and see how you are doing. We will confirm your draft and see if you have anything new to update.
You may begin to receive Creditors Calls
✔ Some creditors will try and contact you on a daily basis using an automated dialer. As long as you do not answer you will probably not receive a message. If you answer, it will connect you to a live person. We don’t recommend you speaking to your creditors.
You will receive Collection Notices
✔ You will receive collection notices on a regular basis. They will write scare tactics and threats to try to get you to call them to make a payment. We know you are delinquent, so you do not have to keep us updated with general delinquent notices.
Your Debt Balances will Increase
✔ Your accounts will continue to accrue interest and late fees until we reach settlement. We take this in to account when we give you the estimated cost of your program.
Your Accounts will be Delinquent
✔ Your accounts will be delinquent until we reach a settlement. Your accounts are usually not eligible for settlement until they are delinquent. Delinquency times vary.
After the Third Month
You will see Settlements Reached at Various Times
✔ You may see your first settlement reached within 4-7 months of the program. Then we will continue settling each account individually, one or more at a time throughout your program as your funds accumulate and the creditors accept settlement.
Your Credit Rating will be Impacted
Initial and Short-Term Credit Impact During Enrollment
Enrolling in a debt settlement program can lead to an immediate decline in your credit score. As creditors are no longer receiving payments, your accounts may be marked as delinquent during the negotiation process, which temporarily impacts your credit score. This decline is part of the strategic approach of the program to enable effective negotiations with creditors.
✔ Your creditors may report delinquency to your credit bureaus, which negatively impacts your credit rating initially. Once we settle the debt, creditors will generally update your account as a zero-dollar balance and note it as settled in full, potentially improving your credit rating. Reporting timelines vary by creditor but typically occur 9 to 90 days after payment is received.
If a delay occurs, you can follow these steps:
1. Gather documentation of the settlement, such as the settlement letter
2. Reach out to the creditor to confirm the update has been submitted
3. Submit proof, like the settlement letter, directly to credit bureaus to contest incorrect entries.
Temporary credit score reductions are an inherent part of the debt settlement process as creditors report delinquent accounts during negotiations, and late fees and penalties may accrue. However, after successful settlements, accounts transition to a "settled in full" or "paid in full" status, reflecting zero balances, which contributes to gradual recovery. Responsible financial habits post-settlement, like avoiding new delinquencies, are key to stabilizing and improving credit scores over time.
You may be asked for Additional Funds
✔ As we are actively negotiating, we may contact you to see if you can add funds. Some settlements are really great and we do not want to miss the opportunity, so we may ask if you can add funds in order to accept it. We want to see you graduate the program as quickly as possible and the best way to speed up your program length is by adding additional funds. If you wish to not receive requests for additional funds, then please advise your Client Success team.
How Are Settled Accounts Reported to Credit Bureaus, and What Can You Do If There Are Errors?
When settling debt accounts, many customers wonder about how their account status will be reported to credit bureaus and what steps they can take if discrepancies occur. Here is a comprehensive overview of credit bureau reporting in the context of debt settlements, based on the most frequently asked questions.
Overview of Reporting Responsibilities
Credit bureau reporting for debt settlements is managed by the creditors or original debt owners—not by debt settlement companies, such as Client Success. Creditors use their own policies and timelines to report the resolution of debts. They are responsible for updating credit bureaus regarding whether an account is paid in full, settled in full, or settled for less than the full balance. Debt settlement companies do not have control over when or how creditors report these payments to the credit bureaus. For any related questions or concerns, it is best to consult the creditor or the credit bureau directly.
Standard Reporting Timelines
Once the final settlement payment is received by the creditor, they typically take some time to update the credit bureau records. Although timelines can vary by creditor, reporting may be completed within a range from 9 to 90 days. This will subsequently update your credit report to reflect a $0 balance and show the account status as resolved—either as “paid in full,” “settled in full,” or “settled for less than the full balance,” depending on the specifics of the settlement agreement and the creditor’s reporting practices.
Most individuals observe improvements in their credit score within months to a few years after settlements, depending on the timely updating of credit reports by creditors and adherence to consistent financial discipline.
Strategies for Improving Credit Scores
Credit Recovery After Program Completion
Following the completion of the debt settlement program, credit scores stabilize and gradually improve as accounts update to a "paid" or "settled in full" status. Building better financial habits, such as timely repayments and using credit responsibly, accelerates the recovery process.
Participating in a debt relief program may temporarily lower your credit score, but there are steps you can take to facilitate recovery and improvement:
Ensure Creditors Update Bureaus: Contact your creditors to confirm they submit updated account information to the credit bureaus promptly.- Submit Disputes for Errors: If inaccurate data is present, gather necessary documentation and file disputes with the credit bureaus to correct errors.
Settle Remaining Accounts: Focus on settling or paying off outstanding accounts, as this allows creditors to submit positive updates to your credit report.
Monitor Your Credit Report: Regularly check your credit report for errors or delayed updates to ensure all settlements are accurately reflected.- Communicate Directly with Creditors: Follow up with creditors regarding delays or discrepancies to resolve issues swiftly.
Rebuild Your Credit: Actively rebuild credit post-program by responsibly using credit products, maintaining low balances, and making timely payments.