Debt relief programs on the other hand entail reducing the total amount of debt that you currently owe, lowering the payments, interest rates etc. Sounds good right. You got something for free and did not have to pay for all of it. However there can be a down side to a debt relief program.
First of all a debt relief program involves negotiating a lower balance owed with your creditors. Some companies will strong arm these companies. While successful in lowering the total debt, they can do irreparable harm to your credibility, to your credit rating. They often charge a hefty fee for their services. At the end of the day, you owe less money, but your credit rating drops and you have to pay them. Is this a good deal.
For some it might be a good deal, but you have to crunch the numbers. Also assess if it really matters if your credit rating tanks. As long as you are not applying for a loan, a car loan or a mortgage in the next 5 to 10 years you probably will be ok. Think twice about going into debt and also about using a debt relief program.
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