People are often afraid to ask for help with their debt because they are concerned it may harm their credit. Maybe you have never or seldom been late with a payment. You may think you are guarding your good credit by continuing to make minimum payments, as long as they are made on time.
The truth is that just because you have a good payment record does not necessarily mean that you are not in trouble with your finances, and it doesn't even mean you are credit worthy in the eyes of a lender.
Major lenders pay close attention to income as it relates to debt obligations. It's one of the three legs on the credit stool —
income, credit and
equity. Your "Debt to Income Ratio" is calculated with information that is thoroughly checked out, and it is very possible that you won't qualify for a new mortgage or car payment in spite of your good payment record.
The good payment record you may be protecting is only part of your total credit picture. The total amount you owe is a large factor also. Additionally, your "debt to income" ratio directly affects whether you can qualify for a mortgage or auto loan, as well as how much you can qualify for. To figure your ratio, use our
debt-to-income calculator.
The bottom line is simple: If you went to your bank and ask for a loan, would you be able to show the lender proof that you could afford ANOTHER payment every month. Probably not. The bank will look at your income and the fact that you are already over-extended with monthly obligations, and determine you are a high credit risk. The bank wants to see that you can afford a new monthly payment, not that you have managed, by hook or by crook, to meet the current minimum payments you already have. So as you can see, good payment history does not necessarily equal good credit or credit worthiness.
It is important in today's world to have good credit. Your credit score can affect everything from your car insurance rates to qualifying for a good job, but as long as you carry large amounts of debt it will have a negative impact on your credit score. We are not suggesting that you should not strive for good credit, but the best way to get back on your feet financially and start improving your credit is to get rid of debt. Our program will help reduce the amount you owe by helping you
pay off all of your unsecured debt. Once you have completed our program and gotten rid of that debt, then we can help to rebuild your credit.
Our Credit Restoration Program can help you get the best credit legally possible so that you can do the things you want to do. A person's credit file has grown increasingly important and will continue to do so as more and more credit approvals and job opportunities rely on your credit file. Our program improves your credit by helping you remove the negative items that cause credit scores to go down. When negative information is removed it can help you reduce your interest rates, help you make the purchase you need, or even improve your chances in an interview or with a rental application. Having the best credit possible is in everyone's best interest.
And best of all, you'll be free of high-interest, non-tax deductible payments on credit cards, and will be able to step off the credit card merry-go-round.
Contact your Debt Consultant to find out if our program can help you. There's nothing to lose by getting all the information you can to make the best decision for you and your family.
