Debt Relief Options – When Should You Stop Worrying About Your Credit …
There are different types of debt relief solutions obtainable in the market. We can categorize these solutions into different categories. One functional method of categorization is to divide methods into those that affect our credit score negatively and those that do not affect or that affect it positively. Debt settlement is an example of the former while credit counseling or increased repayments is an example of the latter.
It is important to know when to stop worrying about the score and focus on debt reduction and when to continue with the current level of debt just to protect one’s score.
If your credit score has hit rock bottom because of your inability to make repayments regularly, then there is no point in worrying about the credit score any more. If you have become a subprime borrower, then it does not matter whether your score falls any lower. Finding lenders ready to risk lending money to a borrower like you in the current economic scenario will be difficult. Hence, you can focus on reducing your debt so that you can use the improved financial condition to raise your score over the long term.
If you are at the threshold of bankruptcy, then worrying about credit score does not make sense. A bankruptcy will sit on your credit history for eight long years. Further, it will have devastating social and economic consequences. How will you explain your decision to your kids who will have to equally suffer it consequences? Choosing debt settlement will help you protect your privacy as negotiations with your lenders take place privately.
The credit score is a reflection of your financial position. Not only lenders but employers and already prospective partners take this factor into consideration. If you do not intend to change jobs or choose a life partner in the near future, then you can ignore your credit score and focus on debt reduction. That is to say, if a low credit score is not going to have a meaningful impact on your life, then you can bring down your debts and enhance your finances so that your credit score automatically increases.