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Will my credit score go up if I settle my credit card debt?
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The perfect financial storm is brewing for many Americans amid today’s unusual economic landscape. For starters, persistent inflation has caused the cost of consumer goods to rise exponentially, making it harder for people to afford necessities like rent, gas and groceries. And, the Fed rate hikes and pauses that occurred over the last few years have led interest rates to be elevated across the board, further adding to the pressure on many people’s budgets.
But even with the average credit card rate hovering above 21%, many people still have to rely on high-cost credit cards to try and make ends meet right now. As a result, credit card balances have been compounding at an alarming rate — and credit card account delinquencies are growing increasingly more common. Maxed-out card accounts have become a prevailing issue, too.
Credit card debt can cause serious damage to your finances and your credit score, though, so if you’re dealing with this issue, it’s important to address it and regain control of your financial well-being if you can. And, one option you have is to try and settle your credit card debt for less than what you owe. But will settling your credit card debt improve your credit score, or will it further compound your credit and financial woes?
Compare the top debt relief options available to you here.
Will my credit score go up if I settle my credit card debt?
The short answer is no, settling your credit card debt (also known as credit card debt forgiveness) will not directly improve your credit score. In fact, the process of settling debt can initially have a negative impact on your credit score. However, it is important to understand the nuances of this process — and how it can ultimately benefit your financial health in the long run.
When you settle a debt, you are essentially negotiating with your creditor, either on your own or with the help of a debt relief company, to pay less than the full amount that’s owed. This arrangement is typically made when you have fallen behind on payments and are struggling to meet your financial obligations. In exchange for a lump sum payment, the creditor agrees to mark the account as “settled” or “paid in full for less than the full balance.”
This notation on your credit report indicates that you did not fulfill the original terms of the agreement, which can temporarily lower your credit score. And, the process of settling a debt often involves the account being reported as delinquent or charged off before it’s settled, further impacting your credit standing.
However, it is crucial to recognize that the negative impact of debt settlement on your credit score is typically less severe than the consequences of continued delinquency or bankruptcy. By proactively addressing your debt through settlement, you are taking a step toward regaining control of your finances and improving your overall creditworthiness in the long term.
And, while your credit score may take an initial hit, the benefits of eliminating a high-interest debt burden can ultimately outweigh the temporary setback. Plus, by freeing up monthly cash flow previously allocated to minimum payments, you can redirect those funds toward other financial goals, such as building an emergency fund, paying down other debts or investing in your future.
Find out more about how the right debt relief option could benefit you now.
How credit card forgiveness impacts your credit score
In addition to the damage that’s caused by making delinquent payments, settled credit card accounts can remain on your credit report for up to seven years from the settlement date. So, while settling high-interest credit card debt helps resolve the outstanding balance, it can take time for your credit score to fully recover from the negative credit scoring impact of settlement.
However, the credit score decline caused by settling your debt is usually less severe than continuing to miss payments and having debts go to collections indefinitely. So, taking the steps necessary to settle and pay off that burdensome debt typically puts you in a better position long term compared to letting accounts remain delinquent over the long term.
Other credit card debt relief options to consider
While debt settlement can provide relief in challenging financial situations, it makes sense to explore all available options before deciding what route makes sense for your outstanding credit card debt. After all, alternative solutions, such as debt consolidation loans, credit counseling or enrolling in a credit card hardship program to obtain more favorable repayment terms, may be better suited to your circumstances in certain cases.
Debt consolidation loans, for example, allow you to combine multiple high-interest debts into a single, potentially lower-interest loan payment. This approach can simplify your monthly financial obligations and potentially reduce the overall interest charges you’ll pay over time. However, it is important to exercise caution and ensure that you have a solid plan in place to avoid accruing additional debt while repaying the consolidation loan.
Credit counseling services can also provide valuable guidance and assistance in negotiating with creditors on your behalf. These organizations may also be able to help you secure more favorable repayment terms, such as reduced interest rates or waived fees while providing budgeting and financial management education to help you regain control of your finances.
Working directly with your creditors to reduce your credit card debt costs may be another option worth exploring. For example, if you’re facing a job loss, a medical issue or another type of temporary setback, some creditors may offer credit card hardship programs or payment plans that can provide relief until your financial situation improves.
But no matter what option you choose, it’s crucial to carefully weigh the potential long-term consequences of each option on your credit score and overall financial well-being. Seeking professional guidance could help, as the right debt relief expert may be able to help you navigate the complexities of each option and make an informed decision that aligns with your goals and priorities.
The bottom line
While settling your credit card debt may initially have a negative impact on your credit score, it can ultimately prove to be a stepping stone toward regaining financial stability and improving your creditworthiness in the long run. So, it can make sense to take that path in certain cases, even with the temporary impact to your credit. And by proactively addressing your debt and exploring all available options, you can pave the way for a brighter financial future, one that’s free from the burden of high-interest consumer debt.
FRAMINGHAM – Stop & Shop stores across Massachusetts had empty shelves on Monday due to a cyberattack.
Stop & Shop shelves empty
People walking into the store ready to stock up before Thanksgiving had to leave empty-handed.
“I can’t buy carrots. I can’t buy lettuce. The vegetables are slim and the meat department is low,” shopper Jim Noto said. “Very disappointing especially this time of the year. It’s just a shame because they are losing a lot of customers.”
“Empty. Completely empty! All of it,” said Maryanne Lambert, who could only get half of her grocery list.
“The produce just wasn’t there. It was awful. What’s going on?” Instacart shopper Tina Diblasi said. She is thinking of taking a vacation from the delivery service until the shelves are stocked again.
Shoppers said they are going to find another store to get their necessities ahead of the upcoming holiday.
Cybersecurity issue
Stop & Shop says it’s a cybersecurity issue affecting its parent company, Ahold Delhaize, and that they have placed signs in stores that tell customers it was because of an IT systems outage.
“While there may be some limited inventory for certain products, we are working to re-stock our shelves and anticipate item availability to continue to improve over the next few days,” the store said in a statement.
Ahold Delhaize says it is investigating the issue and has told law enforcement about the breach. They are taking some systems offline to protect them.
“This issue and subsequent mitigating actions have affected certain Ahold Delhaize USA brands and services including a number of pharmacies and certain e-commerce operations,” Ahold Delhaize said in a statement.
Stop & Shop announced in July that it would be closing 32 stores across five states that were “underperforming.” Seven of those stores were in Massachusetts. The company donated all of the remaining food at the shuttered supermarkets to food shelters near their stores.
“Stop and Shop is a business in some trouble. It changed CEOs in September. They’re closing almost 1 in 10 of their stores even before this. It does seem to be targeting their financial transaction systems so they couldn’t manage payments but honestly, everything is vulnerable,” Professor of Food Economics and Policy at Tufts University in the Friedman School of Nutrition William Masters said.
Paul Teal, an actor known for his recurring role on the TV series “One Tree Hill,” died on Friday after a battle with cancer, a representative for Teal confirmed to CBS News.
“His remarkable talent, along with his gentle spirit, has left an indelible mark on all of us fortunate enough to have known him,” Susan Tolar Walters of STW Talent Agency said in a statement on Monday. “The loss we feel in our hearts is immeasurable.”
The actor’s fiancée, Emilia Torello, shared a tribute to Teal in a Sunday Instagram post, calling him “the most thoughtful, inspiring, driven, self-disciplined, loving man.”
“Paul, you were my soulmate, my soon-to-be-husband, my rock, and my future. You filled my lungs with laughter, my stomach with butterflies, and my heart with love,” Torello wrote in the emotional post. “You were taken too soon, in a battle that you fought bravely without fail. While a part of me died with you, I promise to fight to find joy in life as hard as you fought to live every single day. The world is lucky to have even had a moment with Paul Teal, and I am the luckiest person in it, because I got to call you mine. I will love you forever.”
Teal, who played Josh in the seventh season of “One Tree Hill,” was also remembered by stars Sophia Bush and Bethany Joy Lenz.
Bush said she was “incredibly saddened to hear about the passing of Paul Teal. We are just starting to watch his OTH episodes on [“Drama Queens” podcast] and he’s such a talent.”
Lenz worked with Teal on “One Tree Hill” and on a musical production of “The Notebook.”
“He was too young to die. Far too young. I’m gutted,” she wrote in an Instagram post. “Paul, your time here was like a summer romance for all of us who knew you, especially if only for a season. Bursting, exciting, deeply moving, and unforgettable.”
Teal also appeared in “Outer Banks” and “The Staircase.” He was also part of the cast of “The Hunting Wives,” which is expected to premiere in 2025.
CBS News
TNT’s “Inside the NBA” will air on ESPN, ABC starting next season, as part of NBA settlement
“Inside the NBA” will continue, even though games will no longer be airing on TNT at the end of this season.
The popular studio show will appear on ESPN and ABC beginning next season as part of a settlement between Warner Bros. Discovery and the NBA that was announced on Monday.
The settlement gives TNT Sports, Bleacher Report and House of Highlights a global license for NBA content with no rights fee for the next 11 years.
Warner Bros. Discovery, the parent company of TNT Sports, sued the NBA in New York state court in August after the league did not accept the company’s matching offer for one of the packages in its new 11-year media rights deal, which will begin with the 2025-26 season.
Even though “Inside the NBA” will be on ESPN and ABC, TNT Sports will continue to produce the show. It will air from Atlanta, except when the show goes on the road.
The quartet of Ernie Johnson Jr., Charles Barkley, Kenny Smith and Shaquille O’Neal will remain with the show. Barkley signed an extension with Warner Bros. Discovery in August despite the company losing the NBA.
“‘Inside the NBA’ is universally recognized as one of the best and most culturally impactful shows in sports,” ESPN chairman Jimmy Pitaro said. “We have long-admired the immensely talented team and are thrilled to add their chemistry and knowledge to our robust set of NBA studio offerings to super-serve NBA fans like never before. The addition of ‘Inside the NBA’ further solidifies ESPN as the preeminent destination for sports fans.”
“Inside the NBA” will handle pregame, halftime and postgame coverage of the NBA Finals on ABC, conference finals and the NBA Playoffs. During the regular season, it will be part of opening week coverage, as well as Christmas Day, all ABC games after Jan. 1, the final week of the season and other marquee events.
“The opportunity to continue the iconic and Emmy Award-winning ‘Inside the NBA’ is a huge win for basketball fans everywhere,” NBA Commissioner Adam Silver said in a statement. “We look forward to building on our longstanding partnership with TNT Sports and working together to promote NBA content across key WBD and NBA platforms.”
“Inside the NBA” started in 1989, Johnson became the host in 1990 while Smith joined fulltime in 1998. Barkley came aboard in 2000 followed by O’Neal in 2011. The show has garnered 21 Sports Emmy Awards.
ESPN will also continue to produce “NBA Countdown” and “NBA Today.”
Warner Bros. Discovery will also continue its relationship with the league’s digital operations, including NBA.com, for five seasons. TNT Sports and the NBA have jointly managed NBA Digital since 2009.
Even though TNT Sports will not be airing games in the United States beginning next season, it does have rights to air a full package of games in select countries, including Latin America (excluding Brazil and Mexico), Poland, Denmark, Finland, Norway and Sweden.
TNT Sports will also begin showing 13 Big 12 football and 15 men’s basketball games next season as part of a sublicense with ESPN. TNT will air two College Football Playoff games beginning this season also under a sublicense with ESPN.
Turner Sports has had an NBA package since 1984 and games have been on TNT since the network launched in 1988. That will end after this season.
“Together these agreements ensure fans will continue to enjoy TNT’s ‘Inside the NBA’ and create tremendous value for our entire portfolio as we accelerate the growth of TNT Sports, Bleacher Report, House of Highlights and our global sports business,” Warner Bros. Discovery CEO David Zaslav said in a statement. “We are pleased to partner with the NBA and Disney/ESPN, and to have solidified long-term rights and revenue for WBD.”
