FICO released FICO score loss information based on two hypothetical situations. In the scenario, the person with 680 credit score (who already had one late payment on the credit card) would lose between 45 and 65 points after debt settlement for one credit card, while the person with the 780 credit score (with no other late payments) would lose between 140 and 160 points.
Your credit score might experience a similar drop if you have a credit profile similar to these scenarios. See How Credit Mistakes Hurt Your FICO Score for more information.
Debt settlement will hurt your credit score more if the credit cards you settle are already in good standing and if you end up settling multiple credit card accounts. Debt settlement information will remain on your credit report for seven years, but will have less of an impact on your credit score the older the information gets.
You can better predict the impact of a late payment on your credit score using the FICO Score Simulator, available when you purchase the FICO Standard product from myFICO.com. FICO Standard includes your Equifax or TransUnion credit report and credit score.
