How do you know if you can still do credit history repair?
While everyone is unique, the pattern usually goes this way: people get credit cards before they've learned how to manage them. They overspend on them. They get more cards. They max them out and borrow from one to pay another. Finally, they can even make all the minimum payments and they start falling behind.
No matter where you are financially, there are still options. The primary credit history repair options are bankruptcy, debt settlement, debt consolidation, credit counseling or simply changing your spending habits.
The first concern many people have is how any particular option will affect your credit. The bigger issue is a overwhelming amount of debt. Massive debt ruins your credit AND your cash flow. Keeping negative marks off your credit doesn't do much for you if you're drowning in debt.
Bankruptcy is good for people who have few assets and way more debt than they can pay back. It does cost a little bit of money and it will stay on your credit for up to 10 years.
Debt settlement is a great option if you just want to get out of debt and don't mind temporary bad credit. Instead of paying your monthly payments, you put all that money in a savings account and once your accounts charge off, you negotiate 20-40% settlements with the creditors. If you do this, be sure to get it in writing that the account is settled. Be sure and know the laws in your state because in some jurisdictions, creditors can garnish wages.
Debt consolidation is where you pay off all your loans with one big loan. Usually the only place to get a loan that big when you have too much debt is from your home equity. The danger is that people often spend on their paid off accounts again and end up with twice as much debt. Then their home is in jeopardy because now they have twice the payments to keep up with.
Credit counseling is a complete waste in my opinion. They take a monthly fee from you and negotiate a lower interest rate for you. Then the credit card companies pay them for keeping you making your payments so there's usually a conflict of interest. You can negotiate your own rates and avoid the mark that would go on your credit with a third party intervention.
A final option is to manage your spending better. Pay down your highest interest accounts first and negotiate for better rates. If you need to transfer balances to lower rate credit cards, do it. Make one account give you better terms than the other. Once you pay off one, use that payment to accelerate payments on the next until you're happy with your level of debt.
No matter how bleak your situation might seem, you always have options. Figure out what your long term goals are and choose the options that get you there. - 29866
While everyone is unique, the pattern usually goes this way: people get credit cards before they've learned how to manage them. They overspend on them. They get more cards. They max them out and borrow from one to pay another. Finally, they can even make all the minimum payments and they start falling behind.
No matter where you are financially, there are still options. The primary credit history repair options are bankruptcy, debt settlement, debt consolidation, credit counseling or simply changing your spending habits.
The first concern many people have is how any particular option will affect your credit. The bigger issue is a overwhelming amount of debt. Massive debt ruins your credit AND your cash flow. Keeping negative marks off your credit doesn't do much for you if you're drowning in debt.
Bankruptcy is good for people who have few assets and way more debt than they can pay back. It does cost a little bit of money and it will stay on your credit for up to 10 years.
Debt settlement is a great option if you just want to get out of debt and don't mind temporary bad credit. Instead of paying your monthly payments, you put all that money in a savings account and once your accounts charge off, you negotiate 20-40% settlements with the creditors. If you do this, be sure to get it in writing that the account is settled. Be sure and know the laws in your state because in some jurisdictions, creditors can garnish wages.
Debt consolidation is where you pay off all your loans with one big loan. Usually the only place to get a loan that big when you have too much debt is from your home equity. The danger is that people often spend on their paid off accounts again and end up with twice as much debt. Then their home is in jeopardy because now they have twice the payments to keep up with.
Credit counseling is a complete waste in my opinion. They take a monthly fee from you and negotiate a lower interest rate for you. Then the credit card companies pay them for keeping you making your payments so there's usually a conflict of interest. You can negotiate your own rates and avoid the mark that would go on your credit with a third party intervention.
A final option is to manage your spending better. Pay down your highest interest accounts first and negotiate for better rates. If you need to transfer balances to lower rate credit cards, do it. Make one account give you better terms than the other. Once you pay off one, use that payment to accelerate payments on the next until you're happy with your level of debt.
No matter how bleak your situation might seem, you always have options. Figure out what your long term goals are and choose the options that get you there. - 29866
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Fix bad credit! Do your own credit repair without an agency. Visit www.creditrepairsecrets.org for free credit help.
