Bad credit and overwhelming debt with high interest rates affects the quality of life for many Americans. In an age where people are often hired and given opportunities based on credit scores, having a good one makes life easier. If a bad credit score prevents you from getting a better-paying job, that only compounds the problem.
Settle
The proven, most efficient way of eliminating debt is to settle. Obtaining credit reports from all three major credit bureaus -- TransUnion, Experian and Equifax -- will provide comprehensive information. TrueCredit.com has free reports from each company. Settling provides the critical benefit of stopping interest payments from being added to your mounting debt.
Negotiate Lower Debt Owed
While some individuals are natural-born deal makers, negotiation is a skill anyone can learn, according to Negotiationskills.com. Creditors do not have to settle for less than the original amount, but often do to recover a portion of funds owed.
Negotiate Lower Payments
You can also negotiate manageable payments. Earl Smith, from Illinois, negotiated to pay $15.00 monthly to each creditor until he found a job. He diligently paid. Once he was re-employed, he paid off each creditor, one by one. Use this low-payment tactic only if the debt amount is settled and the company or companies are not adding monthly interest.
Credit Counseling
Contact a credit counseling agency to assist with tackling the debt. Professionally-trained debt counselors help clients set reasonable goals. Not everyone knows what type of debt management they need or what works best. Counselors work with creditors daily. These agencies also refer clients to a bankruptcy or debt settlement attorney if that provides the best option for the client. Justice.gov provides a listing by state of reputable firms.
Program Guarantees
Only use a reputable program. Research the company fully and check for references or complaints on the Better Business Bureau website before signing on. Walk away from a company without a contractual guarantee or you may find yourself facing even more debt in the long run when you add their fees to your debts.
Debt Consolidation
Debt consolidation takes out one loan with a consolidation firm to pay off unsecured lines of credit. This proves helpful for clients who obtain a lower interest rate. Tracking the balance becomes easier because the payment goes to one firm. Securing a fixed, lower interest rate is the key.
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