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How will debt settlement affect my credit if I need to apply for credit while I am paying off my negotiated debt settlement?

If you enter a debt settlement procedure, you will not be advised to apply for any credit during the process. Debt settlement does hurt your credit as your credit card bills go into default during the negotiation process so applying for new credit (if possible) would not be something you’d want to do. It basically sends the message to your creditors that you cannot pay what you owe them but you still feel comfortable taking on even more debt. This is a mixed signal that will likely prevent your settlement from being successful AND may increase the chances that a creditor will pursue a lawsuit against you.

Manty creditors will settle debt and reduce the debt amounts of people who are really in trouble and have made every effort in good faith to repay what they owe. If you apply for more credit during this process they will not think you are acting in good faith.