During debt settlement, your credit score may be negatively affected. When you stop paying your creditors and enter into debt settlement negotiations, it indicates a breach of the original agreement. It can lead to late or missed payment notations on your credit report. Additionally, if a settlement is reached and a portion of your debt is forgiven, it may be reported as a “settled” or “paid for less than the full amount” status, impacting your credit score. It’s important to understand that debt settlement can have consequences for your creditworthiness, and it may take time to rebuild your credit after the process is complete.