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Can Bad Credit Ever Be A Good Thing?

When people are burdened with debt crises, especially if the crisis has just happened, what holds them back from getting organized help is their credit score. What do I mean by this? Well, if someone is having great difficulty meeting their monthly minimums on their unsecured credit card debt and is in fact in pay for life program where the debt will not be paid off for 30 years or sometimes longer, the first question asked is “how will a debt management program affect my credit”.

Please do not misunderstand me, it is a reasonable question and should be asked. The fact is that because accounts in a personal debt management program are closed to further charging, at the time the bank accepts the proposals for new payment terms, the credit score does take a hit. How great a hit, depends on many factors outside the scope of this article. But, because of this fact, some people laden with debt will not proceed, failing to get the point or to understand that they have been brainwashed into debt slavery.

Credit scores rise and fall. Does it make any sense to pay back debt at 30% interest over 30 years, so you can protect your credit score for a few points? The fact is, as you get rid of debt, you will start improving your credit profile, and not be anyone’s debt slave. You will as a debt free person, be totally self-empowered in your financial life. Furthermore, your health will improve, as will your mental outlook. These are very tangible reasons to make the necessary sacrifice to your credit score.

This credit score issue is used by non-profits to tell people to avoid debt settlement, even when debt settlement is the most viable option. The fact is that unless a consumer is in a true financial crisis, they should not be in a debt settlement program. So if the debt-ridden is already in a debt crisis with a poor credit score, then, they are able to see more clearly how a structured debt relief program, whatever it is, can help. Then, the only way to go, in terms of a credit score is up.

Written by:
Steven Ciantro
Member National Association of Certified Credit Counselors American Debt Enders