Safeguarding Your Credit Score

On 10.17.09, In General, by admin

A lot of people are worried about their credit score, and for good reason- the slightest thing can damage it. A poor credit score can prevent a person from getting a car loan or mortgage, and in some cases it can even prevent them from getting a job. However, even more damaging to [...]

A lot of people are worried about their credit score, and for good reason- the slightest thing can damage it. A poor credit score can prevent a person from getting a car loan or mortgage, and in some cases it can even prevent them from getting a job. However, even more damaging to your credit score is a failure to make timely payments on your credit card debt. This is far more damaging to your credit score than the use of credit card debt counseling providers. Research your options, because all credit card debt consolidation services aren’t created equally.

Debt counseling and consolidation are a time-tested and common approach to debt management. Using one of these services has absolutely no impact on your FICO score, it is recorded in your credit history. This can cause a lot of lenders to deny you the money or help you need, because the use of a debt management service is telling them that you are unable to pay your debts.

A far gentler approach is debt negotiation and settlement. Users of this option stop making payments on their cards (or they just pay the minimum) while the agent works with the creditor on the terms of the loan or balance. Usually, they can help to lower your payment, as well as reduce or even eliminate late fees. The payments you make go into an account, where they are held until they match the amount that the creditor agreed upon. Of course, during this time, your credit score will drop because you aren’t making payments, but it will go back up when you’ve paid the settlement. This choice will probably get you out of debt a bit faster, and allow you to save money.

If your credit score is your main concern, opt for consolidation. Because the loan given is secured with collateral (such as a house), it typically carries a lower interest rate-but it’s a lot more risky. If you just want a simpler way to repay your debt, work with a negotiator. You’ll be able to calculate credit card payoff and live a debt free life sooner than you think!