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Myself Jack Dawson.. I am free lance content writer..
Preparing For Debt Settlement: The One Thing You Need To Do Before Clearing Your Debt
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So you’re finally sick and tired of being sick and tired about your debt, and you’ve decided to do something about it. Well, good for you! The hardest part is getting yourself out of that unhealthy ‘woe is me’ mental cycle, and start making decisive steps towards clearing your debt.
At this point, you’ve probably decided how you will go about your debt settlement process. Unless you are doing it yourself, you’ve looked through some of the best debt settlement companies and found one that works best for you.
But there is one more thing…
Before you start settling your debts, in fact, before you meet your debt counselor, you need to have a clear grasp on what your credit scores and credit reports look like. There are various online facilities that can help you demystify your credit reports and understand what your scores mean. Here’s why:
- Having the complete picture
From my years of experience in debt settlement, I have found that most people don’t really have a clear idea of how much they owe. This is usually because people tend to focus on paying the minimum balances and monthly payments, and lose track of how much debt they really have.
The credit report is a quick and easy way of seeing who you owe money to and how much you owe each one. Beyond getting the total amount, you may even discover some debts that you may have forgotten about. This way, you have a complete picture of what you are working with.
- Seeing the impact on your credit score
The assumption most people in debt have is that their credit scores must be good if they have been timely and consistent with their monthly payments. While it may be helping your credit score not to spiral down, the balances you have on your debts are still hurting it. The closer your balances are to the set limits, the more your credit score is hurt.
Therefore, in order to see what your credit score really looks like, you need to get the actual credit scores, since they are not found on the credit report. It will help you make an informed choice on how best to handle your debt in such a way as not to hurt your credit score too much.
- Monitoring tool
One of things you must know by now is that you are not going to get out of debt as fast as you got into it. It is going to take a while - months, and for a lot of people, years to clear out all that debt. Your credit scores and credit reports act as your monitoring tool to see how far you have come and how much further you have to go. You could say they are both your coach and cheerleader working towards getting you debt free.
However, you need to remember that depending on your choice of debt settlement, your credit score may have to dip before it picks up. In this case, you can use your credit reports as monitors.
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