Free Debt Management & Bankruptcy Articles

Professional Authors - Professional Articles

Debt Management Advice - Understanding Credit Scores

Having a bad credit score is just about everybody’s worst finance nightmare and something that we all wish to avoid. It gives the impression that you are not to be trusted (with money anyway), and nobody wants to hear that about themselves. Appreciating that good credit scores are based on trust and keeping (financial) promises means that there are ways of improving less than optimal credit ratings.

There seem to be a lot of stories going around about how a debt management program can hurt your credit scores. Usually, if you have a bad credit score this is something that is a result of not paying your creditors - not because you are involved in a debt management program. The debt management program is a symptom of dealing with the problem, not the actual cause.

When you already have a bad credit score going into a debt management program it is good to know that it can really only get better. When you join a debt management program the agency which assists you reports this. It can actually be evidence of your willingness to commit to and follow a payment plan to rid yourself of liability to creditors. If you are able to show you are trustworthy by meeting your monthly payments and maybe even paying some extra, they can report you as a good willing payer which effects your credit score in a positive way.

Although it can take a very little time to completely destroy your credit score, it can take a long while to restore it. Once a negative report on your payment behavior has been made, it stays there for seven years. Even though your credit score in numbers goes back up if you are sensible about paying out the debt, a negative comment may remain. Of course once you have shown that you are a payer that sticks to the deal that has been made, the negative credit history will be positively influenced.

Getting into business with a debt management company, or taking out a consolidated loan might result in reduced interest rates and lower payments allowing you to better meet your monthly obligations. This will in turn reduce the amount of time until you are completely debt-free which, of course, is good for your credit score.

As stated above, joining a debt management program isn’t of itself a factor which will negatively influence your credit score. It is merely a consequence of the debt that has led to your low score in the first place. However, faithfully participating in a debt reduction program which leads to payment of all your creditors in fact it can have a positive effect on your credit score.

In order to keep track of your credit score and be on top of your credit reputation it might be an idea to join a service which provides you with information about your credit. Then you can check where your rating is up to every now and again to know exactly where you stand.

Marvel Prescott   commented on 30-Aug-2015 11:55 PM
We are one.

Cynthia Burkhart commented on 07-Mar-2017 07:45 AM
Car insurance premium is always a considerable sum no matter how cheap your car was in terms of its cost.

Ken Synakowski commented on 21-May-2018 10:03 PM
Hi everyone. Just wanted to pass on this fantastic article supporting women in business. Please lend you support if possible to this and the #metoo campaign. Thanks

Post a Comment

Captcha Image

bills spending credit company live your life groceries family assistance Consolidation Company making payments debit card credit checks budget ideas piling debts interest overbearing bills common debt traps credit bureaus debt relief agency help with debt credit accounts less money reduce debts house loan loan amount home debts honesty doctors savings expenses assets monthly payments mortgages pay off bill deb consolidation credit line bad debt management flat broke hospital seperate accounts payday loan companies cash card whole family debt management mistakes loan learning experience deals in writing need money charitable organisation management program saving full details introductory offers medical bill social services checking account managing debt lending companies injury debt settlement installment plan paying bills saving money chapter 7 credit card traps home equity payment frequency illness repay allowance cable bill credit report common debt ongoing bills negotiate credit card job loss help total balance control spending debt programs careful handling school jobs worksheet asset info savings account finances trusted friends building debts personal finances medical bills management advice prioritizing loans secured loan discounts debt consolidation loans tracking money unemployed bad financial decisions domestic support interest rate cancer payday loan spend money loan agents debts software modified payment plan bankruptcy debt relief children budget emergency savings account education investing debt solution checks legal action paycheck info budgeting loss of income debt consolidation child spending interest payments hobbies pay off debt unsecured loan great budget ideas high interest rate new job consumer lawyer credit scores Chapter 13 child support credit reports visualization professional get out of debt order report bad debt credit repair good credit repay loans credit card company credit score mortgage payments handling money debt free credit history lending company loan harassment debt management cash become free payment behavior great budget younger children debt collection agency part time job insurances security budget monthly bill your rights management tips debt company extra money internet child support debt unexpected expenses interest rates budget sheet classify bills household items debt problems account fees credit limit repayment plans down payment low interest money insurance implement a budget invest money unreasonable expectations monthly payment children saving rent payments save money telephone bills personal finance credit rating credit card debt car loan regain control debt consolidation medical debt credit credit companies family budget utility payments creditors installment plans live within means account interest specific budget categories back support initial research borrower good budget debt collectors rebuild good credit candidate good credit rating financial education gambling problem debt losing your job income lose your job tax info sickness home equity loans gambling debts understanding home equity account charges purchase protection phone calls loan companies comfortable living monthly budget paycheck restrict spending stop harassment understanding overcharging debt management tips past bad debt bank budget categories bank accounts purchases short sale good debt credit card help court appearance debt collector help losing a job original creditor buying a house borrowing credit card companies debt management advice take control of debt financial security credit cards more income liability borrow money second job receipt teaching children finance filing bankruptcy negotiation extra payments check card salary paying out debt taking responsibility own money government assistance overspending fly-by-night good credit record debt payment period debt traps ill health

Copyright 2016 - Free Info Site Enterprises
Privacy Policy  |  Copyright Policy  |  Website Use Policy  |  Non Endorsement Policy  |  Contact Us  

Finance Blogs
best blogs