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© 2007-2008 CreditCoach4U® |
| All Rights Reserved |
SOLUTIONS
Solutions to credit and debt problem comprise an array of options, many of which are listed here. You can research these further on your own, or consult with a Credit Coach to decide which is best for your situation. There is nothing that you can't learn and do by yourself, if you have the time and energy to research the subject. A Credit Coach can take you to the heart of the matter in very short order, saving you energy and hours of time, as well as reducing your stress levels.
Taking the first step puts you on the road to wholeness.
A large tree grows from a tiny seed.
A tall building arises from a single brick.
A journey of a thousand miles begins by
putting one's foot down.
- Tao Te Ching
Some people have developed borrowing and spending habits that naturally keep their credit scores in the 700's. For those people, "Congratulations, and keep on doing what you have always done." You may occasionally have questions which arise for which you need to consult with a Credit Coach. CreditCoach4U® provides a forum in which to answer your questions. Contact us about our introductory consultation special and other coaching options.
Increasing Scores
CreditCoach4U® can provide you with a Consultation and Action Plan to boost your scores and learn the rules that will improve your credit rating. If you have damaged credit, you can dispute erroneous and questionable entries in your file with the Credit Reporting Agencies. This is called credit repair.
You can implement your Action Plan on your own, use Credit Coaching, and/or employ a Credit Repair Service. Contact CreditCoach4U® with any questions about Credit Repair.
Monitoring Your Credit
Sometimes it's a good idea to monitor your credit. If you are implementing a plan to improve your scores, you can see how you are progressing. If you are concerned about Identity Theft, it's a good way to catch suspicious behavior at an early stage. Do not be mislead by the claims of free credit reports. The only truly free, government sanctioned credit report can be obtained at AnnualCreditReport.com. This is not a monitoring service. For that, we recommend PrivacyGuard.com.
Depending upon your resources and level of debt, you can start with a plan to reduce your debt as quickly as possible and minimize interest payments. You can do this on your own or work with a Credit Coach. If you have come to the end of your rope, there are various options, each with its advantages and disadvantages. All of these solutions negatively impact your credit scores, some worse than others. If you are in this deep, you need to address your debt and then focus on healing your credit score. Foremost among your options:
Do Nothing
Continue down the path you're on. In realistic moments, you know this will not work out well for you.
Do It Yourself
If you have the time, energy, and discernment, you can provide your own solutions. A lot of information, as well as mis-information, is available in the public domain. Some information is only gleaned by being, or having access to, industry insiders. There are informational products available for a fee. Some of them are listed on this site.
Debt Management Plan (DMP)
You enter into a contract with a DMP company and pay an up-front fee, as well as a monthly fee. The DMP disburses your money to creditors, with whom the DMP has negotiated lower rates. DMPs also make money by taking a percentage off of the top of the lowered rates. (For example, your rate is lowered from 20% to 14%. The Creditor gets 12% and the DMP gets 2%.) You do not necessarily get to choose the order in which debts get repaid, so you may be paying the lower interest debts first. Your accounts are generally closed at the time of negotiation, and some Creditors enter negative information on your credit report. Many DMPs are owned by the finance (credit card) companies. This, in itself, presents a conflict of interest.
Debt Consolidation
A consolidation loan is one that replaces two or more loans, usually at a lower total monthly payment. A mortgage is often used to consolidate debt. Beware of Loan Officers that focus on the monthly payment without disclosing the true costs of the loan in up-front fees and possibly increased interest payments.
Credit Counseling
Credit counseling is usually performed at a a non-profit agency and/or connected with Debt Management Planning. They make money in much the same way the DMP companies do. Note that a non-profit is a type of corporation and not necessarily a charitable one.
Debt Negotiation or Debt Settlement
With Debt Negotiation or Debt Settlement, you pay a reduced amount of money for the total debt owed. Usually, you need to pay the reduced amount in a single lump sum. If you work with a Debt Settlement company, they will have you start a savings plan, with some of the savings going to pay their fees. Their fees usually involve a percentage of your savings or total debt, and many involve a monthly fee, as well. So, if a debt settlement company negotiated a 70% settlement on a $1000 debt, you would pay $700 to your creditor, and maybe $150 -$300 to the Debt Settlement Company. We recommend Debt Negotiation, and represent Consumer Recovery Network because they are an outstanding company. For more information, follow this link.
Bankruptcy
The courts decide whether you can be totally or partially relieved of your debt obligations. There are court and filing fees, and attorney fees if you use a lawyer (usually recommended). Bankruptcies are reported on your credit report and remain there for ten years. For more information on Bankruptcy, follow this link.
Debt Dispute or Debt Elimination
You dispute the validity of the claim that you owe any money to a major credit card company. This is a drastic, and controversial measure. You can avoid paying your debt, and you can be sued by the Creditor. This is a similar approach as those who refuse to pay Federal Income Taxes. Beware of companies that claim they can eliminate your debt, lest you find yourself the target of lawsuits.
You can research any of these on your own, or consult with a Credit Coach to help navigate these waters. Thoroughly research any company with which you decide to do business. Many fit the industry reputation of dishonest, misleading, and ineffective. There are, however, good companies that really help people.