Having a bad credit score will tell those inquiring that the consumer has more credit obligations than they can afford, have not been paying their dues and cannot control their money.
Miami, FL (PRWEB) August 21, 2013
The debt relief website, CreditCardConsolidationLoan.org give consumers a rundown of the debt solutions that they can use despite a bad credit score. Some of the debt relief options require a good credit score so consumers can maximize the benefits that they offer. The website felt that it is only right that they educate readers about their options when it comes to getting out of debt.
The title of the post is “Bad Credit Debt Relief Options” and it begins by describing what a bad credit implies. The article mentioned that having a bad credit score will tell those inquiring that the consumer has more credit obligations than they can afford, have not been paying their dues and cannot control their money.
All in all, the article explains that this does not bode well for the consumer. And it also states that the most important task to have a good credit score is to pay off the debt owed. Of course, that is not as easy as it sounds because some debt relief programs require consumers to have a high credit score.
Credit Card Consolidation Loan proceeds to identify the four different debt relief programs that do not require a good credit to be effective.
1. Credit Counseling. This is when a consumer gets the professional help of a credit counselor. They will be advised about personal finance and the debt relief options that they should follow.
2. Debt Management. Based on the article, this is a part of credit counseling. If the consumer qualifies for it, they will be offered debt management as a solution. It involves creating a debt management plan or DMP that will show the lower monthly contribution that will be proposed to the creditor. This plan takes the balance of the consumer and spreads it over a longer term. When approved by the creditor, the consumer will send a single payment to the counselor who will disburse the payment to the different accounts on the DMP.
3. Debt Settlement. The article explains that this debt relief option does not require a good credit but will seriously damage the consumer’s credit score. This is caused by the required payment default that will convince the creditor that the consumer is in a financial crisis. The whole point is to make the creditor agree on a settlement amount that is lower than the debt of the consumer. The latter will pay only that amount and the former will forgive the rest of the debt.
4. Bankruptcy. This is the last option that consumers with bad credit can use. This debt solution can go two ways: liquidation of assets (Chapter 7) or a repayment plan (Chapter 13). The article states that this option will ruin the credit score of the consumer that a bad credit at the beginning usually does not matter.
After the article named all four debt relief options, it turned to the two other debt solutions that may be hard to pursue with a bad credit rating. The two are debt consolidation loan and balance transfer. In both cases, the credit score is necessary for the lender/creditor to see if the consumer is creditworthy enough for the loan or the new credit card.
To read the whole article, visit Credit Card Consolidation Loan or click this link: http://creditcardconsolidationloan.org/bad-credit-debt-relief-options/.
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