Do you have a hard time getting your loan application approved? Are you sinking in the ocean of debts? Are you losing hope in reestablishing that bad credit status? Are you desperate to find a way to avoid ultimate bankruptcy? If you’ve answered most of the questions with a resounding yes, then you are in deep trouble. But don’t you worry because there are always solutions in every crisis. In this case, you have credit repair and debt consolidation methods as your available choices in getting out of debts and that horrible bad credit status.
So what could be the differences between credit repair and debt consolidation methods? What are its advantages, process, and reminders? Let’s tackle it accordingly.
Credit repair and debt consolidation methods are used on a case to case basis. That’s why you must study its tactics first before committing into one. A credit repair is used when you have received notifications from credit bureaus due to your bad credit score. Commonly, the service of a credit counseling organization is obtained to deal with this dilemma. The agency has a credit counselor who will facilitate you in analyzing the reports taken from the credit bureaus then organize and prioritize the negative items you want to remove from your account.
He/She will contact the credit bureaus to eliminate collections, charge offs, and late payments in your report. A debt management plan (DMP) will be made and this will help you in rebuilding your credit status. You can now avoid harassing calls from your creditors. When you have regained a good credit status, you will have easier access to loan approval. The whole process may take at least three months because all transactions are made through mail.
You can also do credit repair on your own by using your bureau credit reports. You need to highlight the items in need of repair and pay charge offs later on. You can now then bring maxed out credit cards and give the balances off. After doing so, you can claim another credit card if you’d want. Between credit repair and debt consolidation methods, the debt consolidation is more complex. You need to scrutinize this option responsibly to avoid risks and declaring bankruptcy. It is consolidating all your debts on a one month based payment system. A debt consolidation organization’s assistance is usually acquired. It is either a non-profit or for-profit association which offers either secured consolidation loan or unsecured consolidation loan. You must determine which service benefits you most.
A debt consolidation consultant will guide you in preparing an income and expenditure analysis and confer with your creditors in disbursing your payments. He/She can reduce your interest rates in half and waive late fees until you become debt free. The process can take only hours since transactions can be made through the internet. But you must be careful not to reveal personal details if you haven’t decided on acquiring such service yet. Lastly, doing it on your own using a debt consolidation calculator can be a big help as well since it will save you time and money.
Credit repair and debt consolidation methods are necessary to help you get out of those debts and to fix that negative credit score. But you must always remember that living within your means, having a good repaying attitude, and practicing habitual saving can rescue you from such dreaded financial nightmares.