Debt,Consolidation,Risky,Busin finance, share, loan Debt Consolidation is Risky Business for People in Need
Thankfully, there are now several web sites that are there to help people like you with bad credit to find the fast personal loans that you need. When you have bad credit, the first thing that you should be looking for is a loan company that If your financial problems have reached the point where you do not see a way out and you feel as though you are drowning in debt, your best way out is through declaring bankruptcy. Filing may well allow you to get your finances back on track
I recently met with a potential mortgage client. This couple was trapped by one of those easy to overlook agreements found so often in troubled mortgages today. Their adjustable rate mortgage payment was about to go higher, and taxes were not included in the mortgage payment (or in their monthly budget). They were afraid they would lose their home any month. Well, theyre not alone in their situation, and coming to a mortgage professional for help was very wise. Unfortunately, they did something before coming to talk to me that hurt their FICO score and will prevent me (or anyone else) from being able to help them right now. What did they do? They paid off their credit cards for less than the full amount owed. Why did they do that? Like many people today, they had turned to credit cards to pay their bills when they got behind. Its not the best solution, but its common. The more unmanageable the credit card debt became, the more desperate they became for a quick solution. So, they turned to debt consolidation. Debt Consolidation is a tempting solution thats better left alone. Yes, I know that you hear those radio commercials all the time, but it really is better for you to pay off your debts in full. What is Debt Consolidation? Debt Consolidation Companies are companies that work with you and your creditors, making agreements for you to pay less than the full balance of the credit card. They are able to do this by telling the credit card companies that they should accept the lesser amount or risk nonpayment. Sounds good for you, doesnt it? Im sure that you heard the phrase that if it seems to be too good to be true then it probably is. In this case, its true. Debt Consolidation affects your FICO credit score. When a credit card company accepts the agreed upon payment, they report to the credit reporting agency that your account was settled for less. This is a negative mark on your credit. I have always told you that the more recent a negative entry on your credit report, the more it affects your credit score. Just think if you do this with multiple accounts and all the negative marks appear on your credit report. Where will your FICO score end up? And to top all that off, you are paying the Debt Consolidation Company a fee to do this to your FICO score. Dont forget that you need good credit to refinance an unmanageable mortgage, get your dream job, or lower interest rates that are draining your entire monthly budget. The better solution would be to go to a Debt Management Company. Debt Management Companies are usually non-profit companies that will look at your whole financial picture, give you counseling and educate you. You give the Debt management Company your monthly bill paying amount and then they distribute your money to the creditors to pay down your debt. This does NOT hurt your FICO score and is the better choice. Make sure you use a reputable company do your homework.
Debt,Consolidation,Risky,Busin