Debt consultants from the Vancouver Island regional base of 4 Pillars Consulting Group explain how debt restructuring affects credit scores. Canada provides its citizens with several options for settling debt they otherwise can’t pay back alone. Many, however, are reluctant to approach debt restructuring specialists for fear of how it would affect their credit scores. What consumers need to understand is that the mere act of consulting with an expert proves inconsequential to credit rating. If anything, it shows creditors that a debtor is serious about reducing debt.
What directly influences credit score is the debt management plan that will be used. Understandably, the credit score will dip because the client has taken drastic measures to settle debt. When one files for bankruptcy, he will receive an R9 rating. This is actually the lowest score a debtor can have, and it will remain on his record for at least seven years. Filing for a consumer proposal will lead to an R7 rating, which is higher than R9 but still considered very low. An R7 rating indicates that the debtor has been able to strike a deal with his creditors, making him eligible for opening up new credit lines in the future. Read more from this article: http://bit.ly/2wvS6Uo
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