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

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

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

Finance Blogs
best blogs