The Importance of Credit Repair in the Debt Resolution Process

The Importance of Credit Repair in the Debt Resolution Process

Looking for a debt resolution strategy to boost your credit score? Clean your credit.

Looking for a debt resolution strategy to boost your credit score? Clean your credit. By cleaning your credit, you won’t be tempted to max out your credit cards. The inaccurate entries will be removed, thereby increasing your credit score. It’s so much better than getting new loans to pay off your high-interest consumer debts. Cleaning your credit also gives you an opportunity to check your borrowing history, adjust your debt management strategy and start over with a clean slate.

Benefits of cleaning up your credit while you are thinking of debt resolution strategies

Credit repair is not a loan.

Looking for a way to do something right now about your overwhelming debts? Credit repair will do the trick.

Request a credit file from Equifax and other reporting agencies. You will have many pages to look into, and debts to review. You can check them over and over until you see some serious errors that could probably save you hundreds to thousands of dollars in your monthly bills. You can also dispute bills that you have already paid and credit card charges and other debts that do not belong to you.

You won’t be tempted to take out another loan unless it is necessary because you will have a complete understanding of your liabilities. It’s so much better than immediately looking for debt consolidation loans or getting a mortgage to settle defaults. Cleaning up your credit will also help you avoid inaccurate reports that can seriously damage your credit score.

It helps you negotiate with creditors.

Debt resolution is the process of negotiating with your creditors to decrease your overall debts in return for a lump sum payment. The creditor may agree to forgive a certain percentage of your total balance. But, it is applicable to unsecured debts like personal loans. Loans secured by real assets like houses or cars are difficult to settle.

By cleaning up your credit first, you will have a clean credit file to refer to when negotiating debts on your own. You don’t have to hire a debt settlement agency to do the work for you, thus saving in fees that you would have otherwise paid to your debt settlement company. It also gives you more control over the debt settlement process.

Why do creditors agree to lower borrowers’ debt balances, sometimes—up to 50%?

Creditors agree to debt settlement in order to recover what it can and to prevent the borrower from filing bankruptcy—which puts the creditor at risk of losing the money lent to the debtor. The debtor usually takes advantage of this opportunity to avoid bankruptcy while still lowering their debt balances by up to 50% or more.

Collection agencies negotiate with borrowers and agree to take less of the owed amount, especially if they have purchased the debt from the original creditor for a fraction of the original debt.

If you have already cleaned up your credit report, either by disputing entries on your own, or by hiring a reputable credit repair agency like Clean Credit, you can request the collecting agency to remove the collection from the credit report.

Although the negative entries from the original creditor remain, the removal of the collection account from the consumer credit report will be favorable for your credit score.

It helps you prioritize debts.

Do you have a limited amount of money to put toward your debts each month? If you have a clean credit report, you will be able to prioritize where you have to spend your money. By looking into your clean credit file, you can focus first on the credit accounts that already in danger of becoming past due and loan defaults that costs you high interests and fees.

With proper prioritization, you can get many or all of your accounts current as possible. You can also make a plan to bring down your credit card balances. In fact, looking into your credit file gives you an idea of your borrowing habits and helps you make some adjustments in the way you handle your money. Keeping your credit file handy also makes it easier to check which of your accounts have already been charged-off or sent to collection agencies.

No one can underestimate the benefits of credit repair

Credit repair fixes incorrect information and payments that creditors have incorrectly reported late besides the accounts that aren’t really yours. Even past due accounts that have been sent to collections and those that are charged off will be checked. You will be able to verify maxed out accounts that are over your credit limit and see if you really did it, or it was merely inaccurately reported.

If your credit repair company successfully made a dispute, your credit report will be updated. Other credit bureaus will be informed about it and you will receive a copy of your updated credit report. But, even if the item isn’t successfully removed from your credit file, your report will show that you’ve disputed the information. You can also and add a personal statement explaining your side and anyone who reads your credit report will be able to read your personal statement.

Contact Clean Credit today and learn more about the debt resolution process and how credit repair can help you.

 

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