Are you someone who has drowned in a sea of credit card debt? Are you someone who has been carrying multiple credit cards and using them to their fullest? If you’re not aware of the exact ways in which you should use your credit cards, it’s high time that you know the correct steps that you should take with your credit cards.
When you can’t buy something with cash, you immediately feel the urge of using your credit card but if you would analyze the situation that you would go through when you’ve fallen back on your bill payments, you wouldn’t have taken such steps. Nevertheless, when you’ve already incurred debts, you should immediately opt for credit card debt settlement, through which you can reduce the total amount of debt that you owe. If you’re not aware of the ins and outs of the credit card debt settlement process, here are some facts that you should consider.
Debt settlement – How does the process work?
When you get help of a credit card debt settlement company, the debt consultant will take over responsibility of handling your debts. You have to surrender all information about your debts, like the name of the credit card companies, the total amount that you owe as the principal amount, the interest rates that you’re paying on each amount and the due dates on which you’re supposed to repay your debts. The debt consultant will then negotiate with your creditors and tell them the reason behind your financial hardship that is barring you from making timely payments.
The creditors will take a look at the present financial situation that you’re going through so that he knows whether or not you’re lying to the creditors for getting a portion of your balance waived off. If he understands your situation, he will waive off a certain portion from the principal balance that you owe so that it facilitates the entire debt repayment schedule. The remaining amount has to be either paid in a lump sum or through single monthly payment stretched throughout a long period of time.
Credit card debt settlement – The impact on your credit score
Most consumers aren’t aware of the bad impact of debt settlement on their credit score as the representatives don’t inform them often. But since you’re not repaying the total amount that you owe according to the agreement signed with the credit card companies, this will have an adverse impact on your credit score.
The better your score was, before settling, the more will be the drop in your credit score and the lesser was your score before debt settlement, the lesser will be the impact. Whatever is the credit score of the consumer, it will certainly plunge after settling your debts and you should be aware of this.
Therefore, when you’re wondering about getting help of the credit card debt settlement firms, you might take into account the above mentioned facts. Go for immediate credit repair so as to become a favorite among the lenders in the long run. To know more, you may join DebtCC community on Facebook.