(Franklin Debt Relief is not a credit repair organization and debt settlement will likely have an adverse effect on your credit). 

Everyone knows that for most consumers, debt settlement, also known as debt negotiation, can cause a serious credit hit. Far fewer understand that it is possible to bounce back and what action is required for this to happen. Nothing in credit is forever. Even consumers who file bankruptcy see their credit scores in respectable ranges within 4 years in some cases. How is this possible? In short, by using credit responsibly—paying your bills on time, using a small portion of your available credit, and not racking up that much debt---your credit scores can rebound over time. The next logical question is: how can I use my credit responsibly when no one will extend any to me?

Gas / Department Store Cards – Gas and department stores tend to be much easier to qualify for upon completion of your debt reduction program than regular credit cards. Once you’ve established solid credit history, ask to increase the credit lines.

Secured Credit Cards - Secured credit cards are even easier to qualify for after your debt negotiation program than gas or department store cards. A secured credit card is much like a debit card in that your purchases are automatically withdrawn from the amounts you have deposited. Avoid secured credit cards with high annual or up front fees, and look for ones that report to the three major credit bureaus.

Once you have credit extended to you, remember these keys to responsible credit use:

Budget – By knowing where your money is going each month, you’ll be able to locate any problems in advance.

Start Saving – By creating an emergency fund, you won’t have to use your credit lines in the event that something comes up, which inevitably will happen at some point. If you don’t have insurance, get it. Medical bills are the number one cause of bankruptcy.

What else can you do to improve your credit after debt settlement?

Pay Down Debts You Didn’t Settle - Outside of payment history, the amount you owe is the largest part of your credit score. If you want to improve your credit, start by paying off your student loans, auto loans, mortgage, or anything else that wasn’t included in your debt relief program.

Make Sure the Credit Reporting Agencies List Your Debt As Satisfied – If the credit reporting agencies continue to report that your debt is unpaid and delinquent, your credit will never be able to rebound. Contact Experian, Equifax, and Transunion if you see a mistake.