Given the potential for a negative effect on your credit score, you might now be wondering whether settling your debt is worth taking the hit to your credit.  This entirely depends on your current financial situation and your reasons for wanting to settle your debt.  If you’re genuinely in a difficult place financially and can’t afford to keep paying your debt in regular instalments, but have a lump sum of cash saved up to cover part of what you owe, then a settlement will most likely be worth it. This is because, although your credit score will suffer, the damage won’t be as bad as if you cease paying off your debt altogether.  Getting a debt settlement is also more likely to be worth it in the long run if you’ve already paid off a portion of your debt, because this shows that you have made an attempt to be a responsible borrower, and this may reflect on your credit score at the end of your proceedings.  If you’re considering debt settlement as a ‘cheaper’ alternative to paying off your debts, however, then we wouldn’t recommend going this route. Your transaction history and previous history of debt repayments are likely to give your motive away and paint you as an irresponsible borrower, which won’t reflect positively on your credit score. In fact, you may find yourself in a less stable financial position than before due to the repercussions of a low credit score on taking out any loans in the future.