Is Debt Restructuring Through Debt Management Companies Bad For Your Credit?

  • Print Article |
  • Send to a Friend |
  • |
  • Add to Google |

Managing your debt well and getting your financial life on track will actually raise your credit score. It takes time to get back to better scores and get lower interest rates.  You need to have patience RE-ESTABLISH your credit step by step.

Debt managing companies offer to restructure your program and make payments to your creditors through them.  You have to make one single payment to the debt managing company and forget the headaches of whom to pay and how many payments to be made and allow them to make the payments.  The debt management company will then make the payment to each of your creditors. 

The debt managing company helps in restructuring the debt by negotiating lower finance charges, interest rates and get financial penalties removed.  A debt managing program is the final chance to redeem your credit.  Make sure to be faithful and stick to the deadlines with the debt managers.  Once you join such a program you will be required to close all your credit card accounts so that you do not start to run up more debt.

Debt restructuring and consolidation programs are basically meant for people who have a monthly income and can make a monthly payment on their debts but just need a little help in getting the monthly payments reduced.  If you are suffering from severe financial hardship and cannot make a monthly payment then you need to seek legal remedies.

Normally repairing your credit rating after a bad spell of debts takes 7 years.  However if your accounts are paid off it should actually raise your credit faster.

A word of warning is appropriate here.  Stay away from credit repair agencies. They charge a lot for things you can do yourself and many times they don't help.  Restoring your credit is doable. Debt management companies help to restructure and help you plan the debt settlement.  It takes time, diligence and lots of patience.  You could be back to a respectable credit in a short time.

Srinivasan Gopal is an author, syndicated writer and a management professional.  Loves the internet and webmaster of www.internetbusinessprofit.info/affiliate-marketing a website where you can find answers to many of your How To's on affiliate marketing

Article Rating (1 stars):
  • article full star
  • article no star
  • article no star
  • article no star
  • article no star
Rate this Article:
  • Article Word Count: 304
  • |
  • Total Views: 224
  • |
  • permalink
  • Print Article |
  • Send to a Friend |
  • |
  • Add to Google |
>