Article : Eliminate Your Debt and Effectively Manage Your Credit Score

source : ezinearticles.com
By Divya Mishra

The toughest aspect about any and every debt reduction plan is not the negotiations or the regular repayment of the debts. Instead, it is the negative impact on the credit score that is most difficult to manage.

Just as you cannot live without unsecured debt, you cannot live without your credit score. In such a scenario, it is obvious that you will have to manage both these aspects simultaneously. Managing debt relief as well as your credit report is like trying to juggle three balls at once when you have just one hand.

Holding on to a single ball is only going to hurt you more. In such a scenario, you should know how to juggle the balls effectively.

Elimination of debt by requesting your creditor for a 90% discount is, at least in theory, possible. However, what about the practical aspect? Do you think any credit card issuer will be interested in helping you out after you seek a 90% discount? Obviously not.

If you can not repay anything more than 1/10 of your debt, it is obvious that you are terrible at financial management. This information will be clearly stated in your credit report and you will find your credit score coming down drastically.

That is the reason why you should manage your debt relief program in such a manner that your debts come down even as your credit score is protected. You should go in for a reduction program that leaves you with sufficient debt that can be repaid in full.

That is to say, if you go in for 50% discount, you will have to repay the balance 50%. This means that you will have to strict towards disciplined repayment plan and fulfill your obligations very quickly.

Needless to say, this will have a huge impact on your credit score. The fact that you sought a waiver of 50% of your debt will work against you. However, the fact that you repaid 50% will definitely work in your favor.

In such a scenario, choosing the right remedy which will help you balance both these aspects is a very important task. Rather than trying to do everything on your own, it makes sense to get in touch with professionals who will advise you on the right way to negotiate and proceed.

There may be instances where card issuers may be prepared to offer a 70% discount. Going in for a 50% discount will definitely impress them that you are trying to do your best. They may even not specify that you have discharged your loan. This might even help you overcome your negative hit on the credit score.

If you are one of the millions of Americans who has over $10,000 in unsecured debt, it is time you found out about the debt settlement options available to you. Due to the current economy an overwhelming amount of people are in debt, creditors are having no choice but to agree to debt settlement deals.