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Preparing For Debt Settlement: The One Thing You Need To Do Before Clearing Your Debt

Mar 12th 2015 at 2:48 AM

Raring to go!

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.

Debt Settlement

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.

 

 

2 comments
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May 3rd 2015 at 4:24 AM by thomassujain
After a long search I get such fantastic article related to debt settlement. Thank you for writing such informative article for us. I am always I search of articles on debt settlement topics and checks debt settlement reviews regularly. Because these reviews are really important in preparation of debt settlement. Before clearing the debts one should look for credit score first. Credit score plays important role in debt settlement. With the help of your writing skills you have written an extraordinary article. This article clears the concepts of the peoples about the preparation of debt settlement. I will share this with my colleagues.
   
Apr 28th 2015 at 3:33 AM by Andybrown
I must say that before clearing the debt, people should read this article. The one thing you mentioned in this article is most important and considerable whenever clearing the debts. You have nicely introduced the concept of monitoring tool. Lot of thanks for mentioning your thoughts about monitoring tool. What are the impacts on the credit score is superbly explained. By this article I get to know that your debt settlement reviews are very much clear. Your study about the debts and its related concepts is must be huge that is the reason you have written such a good article. Good luck for future writing.
   

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