| Credit History Repair: What If It's Beyond Repair? |
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| Written by Tiffani G Peterson |
| Thursday, 05 November 2009 20:30 |
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Is it too late to still do credit history repair?
Is it too late to 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. People often worry how making any changes will affect their credit. The more important issue is the mountain of debt that's eating your financial future. With too much debt, you won't be able to get any more credit anyway. Plus it's disrupting your cash flow. 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. A great option for people who have too much debt but a steady income is debt settlement. Instead of making your monthly payments, you save that money and offer your creditors lump sum settlements in the range of 20-40% of the total. Be sure to know the laws in your state and get everything in writing. If you have too many assets, your creditors might attempt to sue you or garnish your wages. Debt consolidation means you get one big loan and use it to pay off your other loans. You'll want to make sure to avoid the trap of using those paid accounts again and getting back into debt. Additionally, people often do this with a home equity loan which could put your home in jeopardy if you can't make the payments later on. 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. While your current situation may look dismal, there are always options. Figure out what you really want to accomplish and get started. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Fix bad credit! Do your own credit history repair without an agency. Visit www.creditrepairsecrets.org for free help. |