Do Debt Management Services Ruin Your Credit?

Do Debt Management Services Ruin Your Credit?
  • Opening Intro -

    Many people have current issues with overwhelming debt. The reasons for such debt issues vary.

    Some people suffer from the loss of a job and fall behind on their debts.

    Other people experience life changes that put a strain on their available cash.

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A majority of these people would like to take proactive steps to improve their credit ratings and reorganize their finances. Clients often consider debt management services as an option.

However, existing rumors have some debtors afraid to take this crucial step toward recovery. One rumor about debt management services is that they ruin a debtor’s credit.

What Are Debt Management Services?

In order to challenge the rumor about debt management services, consumers must understand what they are.

Debt management services are not limited to one product. They are a collection of strategies, tools, courses, and advice that help debtors to manage their finances.

Many management services come in the form of counseling and advice. It is impossible for counseling to ruin a debtor’s credit. Only the debtor can ruin his or her credit.

The debtor also has the power to enhance his or her credit. The way he or she can do such is by acting on the advice given by an experienced credit counselor.

Other Debt Management Services

Counseling is not the only management service a debtor can obtain for help. Some companies offer debt consolidation services.

A consolidation is the merging of a person’s numerous credit accounts into one larger account. Consolidations relieve the debtors of stress and they make payment more organized.

Debt management companies will often make payments to lenders for the debtors. They will also negotiate with creditors and attempt to get them to reduce interest fees and finance charges. Debt management companies charge fees for these services.

Consolidation services cannot adversely affect the debtor’s credit. If anything, the consolidation services would help. Most debtors’ credit scores have already dropped by the time they seek assistance. A consolidation will only help at this point.

Debt Management Services: The Final Verdict

Debt recovery actions do not harm the debtor’s credit score. What hurts a person’s credit score the most is when that person does nothing to resolve their situation.

Many debtors are guilty of not taking any action when problems arise. Passive debtors allow their credit ratings to plummet in hopes that the problems will magically disappear.

Active debtors contact debt management companies and speak with representatives. These people find innovative ways to get back to financial health and freedom.

It is important to understand what debt management services are and how to benefit from them. This article elaborates more on debt management. All the more reason for you to share it on social media and help out a person who needs such valuable information.

References:
https://credit.org/debt-management-plan/
https://www.nationaldebtrelief.com/how-debt-relief-affects-credit-score/

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Consumer Tips reference:

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Last update on 2018-12-09 / Affiliate links / Images from Amazon Product Advertising API

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Categories: Debt Management