SOURCE: Total Debt Relief
November 16, 2010 16:30 ET
Why Some Consumers Trade Higher Credit Scores for Debt Relief
There Tends to Be a Debate on the Consequences of Debt Relief and the Effects It Might Have on One's Credit Score; Total Debt Relief Provides Insight Into the Matter
LOS ANGELES CA--(Marketwire - November 16, 2010) - While the need for debt relief is certainly in demand considering the term "debt relief" is searched a total of 246,000 times a month, there tends to be a major consequence when participating in certain professional debt relief programs, that consequence being FICO credit ratings. Some consumers might be reluctant to sign up for such programs like bankruptcy and debt settlement due to the affects it will have on their credit score.
It is true debt relief programs like debt settlement and bankruptcy will have negative effects on a consumer's credit score. However, the same can be said about doing nothing for their credit card debt. Even paying the minimum every month can have consequences to a credit score. It is important for consumers to think long term regarding their finances. Simply because a program that can achieve debt relief will hurt a person's credit score is not a reason it should be avoided.
Debt settlement accomplishes debt relief through a negotiation process whereby a debt negotiation specialist speaks with creditors on client's behalf in order to lower the overall debt owed. Once the program is complete consumers credit card debt is paid off for only a portion of the debt owed. In this program consumers might have to stop from paying credit card bills and in turn hurt their credit score. However, as long as the program is completed successfully, consumers will then be able to start building back their credit with smart spending and budget management.
Those with high credit card debt should know that an estimated 30% of one's score is based on how much they owe vs. how much credit they are allowed. Therefore, relieving how much is owed and having creditors report debt satisfied is far better than unpaid credit card bills.
For Americans struggling with credit card debt and refraining from debt relief programs because of credit scores, talk with representatives from prospective companies to answer the questions they have about debt relief and credit scores.
Total Debt Relief Provides a free debt evaluation which can be taken advantage at: