Bad Credit Fix
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A bad credit fix can consist of consumer credit counseling services encouraging consolidation, payoff, or reduction of debt. Typically, an individual would need to repair their financial history before they purchase a home, vehicle, or receive discounted rates on renting and insurance. Consumers seeking any type of credit with a poor financial history should consider bad credit fixes immediately. The problem with most repair options is that they require the individual to pay off the majority of their debt. Generally, the individual in need of this assistance does not have the funds available to payoff their debt. There are some strategies available that allow the consumer to repair problems while saving on fees and additional expenses.
One way to lower debt is a consolidation loan. While this type of bad credit fix virtually replaces one type of debt for another; the consolidation loan usually results in a lower interest rate than the combined interest rates, and offers the debtor one low monthly payment for a longer term. The goal for bad credit fixes is to get the consumer completely out of debt, not to offer a convenient way to bring down the amount owed in order to slip back into the same situation. There must be a certain level of self control if using the method of consolidation.
The next strategy the consumer can consider is seeking a financial counseling service. This is an organization that acts as a third party intermediary in the bad credit fix situation to contact the creditors and make arrangements between them and the debtor. This is done by submitting one payment a month to the financial counseling service, and they divide that payment and submit it to the creditors as per the agreement. Bad credit fixes involving a third party intermediary should allow the debtor to check with the BBB or Better Business Bureau to establish a high customer satisfaction rating with the counseling organization before signing any paperwork or submitting payments to the intermediary.
The most effective bad credit fixes will involve the strategy of paying down balances to at least 20% of their limits. This can raise a financial reporting score up to 30 points in as little as 30 days. This strategy may include the debtor seeking funding from a friend or relative if they are not able to pay the necessary amount. A Christian's goal in a bad credit fix should be to eliminate all forms of debt. The Bibles says in Ecclesiastes 5:4-5 "When thou vowest a vow unto God, defer not to pay it; for He hath no pleasure in fools: pay that which thou has vowed". A person that creates financial obligations makes a promise to pay their creditor. Any promise made by a Christian to another is also made unto God.
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