Out Of Debt, But Credit Is A Wreck

Out Of Debt, But Credit Is A Wreck


Those ads on cable television seem to be played over and over again: companies offering debt management solutions to debt managementhelp you overcome your financial burden. On the surface, they sound like a godsend, but in reality what you could really be getting may leave a long lasting sting.

Even when the economy is humming along, there are plenty of consumers who find themselves over their heads in debt. Today, with the economy slowing to a crawl, the numbers are mushrooming, providing an ever growing customer base for “credit counselors” to work with.

Typically, when you use one of these companies you’ll sign on with the promise that they’ll get you better interest rates and lower your monthly payments. What you don’t always find out is that your credit rating will be wrecked in the process.

Debt Management And Your Credit

Specifically, if you use most debt management services and then apply for a mortgage, lenders will rate you the same as the consumer who filed for Chapter 13 personal bankruptcy. Why is that? Because in order to extract the better rate from your debtors, they will lower your creditworthiness to the point where your credit standing is, in effect, trash.

So what is the solution to overwhelming debt? Answer: develop your own get-out-of-debt plan. It isn’t easy to do, it takes time, and it is a lot of work, but it’ll do something for you that no debt management company can: preserve your creditworthiness.

For additional tips, please check the resources which follows this article.


Reduce Credit Card Debt

Reduce Personal Loan Debt

Reduce Mortgage Debt

Reduce Student Loan Debt


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Categories: Debt Management

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".