Help For Getting Out Of Debt
Debt Settlement and Credit Repair Are Not The Same Thing
The consumer is faced with many choices when it comes togetting out of debt: consolidation,credit repair, debt settlement, do-it-yourself, and bankruptcy . Clearly, some of these choices are betterthan others for your financial future, and it is important to know thedifferences between the different methods. Services that offer to repair your credit and those that offer tonegotiate or settle debt are often lumped together and the terms are usedsynonymously. They are not, however, thesame. What is the difference and whichis right for you?
Debt Settlement is a method to reduce your balances in whichfinancial experts negotiate with creditors in order to reduce what you oweoverall. For instance, a $10,000 creditcard bill may be negotiated down to $5000 or even lower. The goal is to make the amount manageable soyou can pay your bills in an ethical manner. You can do this without a professional, but it often helps to have aspecialist handle negotiations.
CreditRepair services, on the other hand, offer to “fix” yourcredit. They do this by examining yourcredit report line by line to find inaccurate items. If they find one, they report it to the threemajor credit bureaus in order to have it removed from your report. It can be helpful to have professional helpwhen you spot an inaccuracy or when you are not sure if a balance isvalid. However, it should be noted thateverything a repair service does for you can be done by yourself. You are entitled to one free credit reportfrom each of the three major credit bureaus each year and can disputeinaccuracies yourself.
There is also the potential that you will fall prey tounscrupulous repair companies. Whilethere are reputable companies that offer useful service, there are also thosethat would “fix” your credit using unethical or even illegal methods. If you do need to dispute an inaccuratecredit report item and would like help, make sure you know how to avoid thescam repair services.
Typically, you can identify these scams by their wording andclaims. For instance, a reputablecompany might tell you that they can dispute inaccurate, out-of-date, orout-of-compliance items. They may alsooffer financial counseling so you can keep your credit report clean. A scam may say something like, “We willeliminate your bad credit! 100% guaranteed!” or “Remove bankruptcies, liens, loans, and judgment from yourreport!” Some even tell you that you can“Create a new credit identity – legally.”
Be assured that all of these claims are false. No one can remove bankruptcies, judgments,liens, or loans from your credit report – unless they are inaccurate. If you owe the money, the black mark on yourcredit report is not going anywhere until it is settled. And you can certainly not create a creditidentity legally. In fact, that isfraud.
The ultimate goal of both debt settlement and repair is tohelp you achieve a better credit score. Repair services do this by cleaning your report of old or inaccurateentries. Settlement does it by attackingthe problem directly. This way, youraccounts read “Paid in Full,” instead of delinquent. The right one depends on your needs. If you are struggling under loads of creditcard and other unsecured debt, debt reduction may be the best way out foryou.
Learnabout debt settlement, debt consolidation , debt relief, and more at Impact DebtSettlement.
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Sean Horan is the President of Impact Debt Settlement, a leading debt settlement company. Impact Debt Settlement utilizes debt settlement to offer clients a better way to consolidate debt, saving them from the confusion and embarrassment of the usual deb
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