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Debt Relief: Difference between revisions
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==Debt Management== | ==Debt Management== | ||
'''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management. | '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management. | ||
Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help. | |||
The steps most of these agencies take to help debtors eliminate debt are: | |||
1.) They help debtors to assess his/her debt situation. | |||
2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with. | |||
3.) The final steps are helping the client to build and maintain good credit. | |||
Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again. | |||
==Managing Your Credit== | ==Managing Your Credit== | ||
Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered "high risk" and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. | Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered "high risk" and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. | ||