You might be thinking about settling your credit account. Regardless of whether it is a credit
card or your clothing store account, now is a good time to do so. Perhaps you have received
a salary bonus and have decided to do the right thing and settle your debt. Debt settlement,
simply put, is where you agree to settle your outstanding debt in one settlement amount.
This may mean that you’ll need to negotiate with your creditor on an amount that you’ll
then need to pay. The amount is usually calculated as a percentage of your full outstanding
amount. Depending on your payment history, creditors could offer a discount on this
Tips on how to approach settling your debt:
1. Total your debt: To make sure you understand how much you owe and will have to settle,
you need to understand your debt. Contact your creditors and ask for the total of your
outstanding balances. This will help you make an informed decision about which debt you
are able to settle.
2. Negotiate carefully: Once you have informed your creditors about your plans, they will
work out a settlement amount for you. The settlement amount is a percentage of the total
balance. It may also be discounted. Your creditor will likely insist that the new amount is
paid within 48-hours, after which the offer will no longer be available.
3. Get a paid-up letter: Once you have settled your debt, make sure that your creditor
acknowledges this and sends to an email or letter confirming your debt is paid. It services as
your receipt and is your proof of settlement.
4. Ask for an ITC update: There may have been times when you have missed a payment to
your creditors. This means that your credit score will be negatively affected. If this has
happened, it is important to ask your creditor to send an ITC review request so that the
credit bureaus are made aware that you have settled.
Once settled, stay debt free
It is satisfying to be able to settle your debt. The trick is to remain debt free. Cancel your
store cards or hide them away so that you won’t be tempted to buy those gorgeous shoes
on account, and so rack up more debt.