Credit repair through debt consolidation

credit repair

Most people living in the western, developed countries in this day and age are (or have been) guilty of overspending at some point. In more than one way, the guilt is not really with the individual. Much of our financial system is based on constantly increasing levels of production, and in order to have an ever growing production, you need overgrowing consumption of goods, services and commodities. With this in mind, it’s easy to understand why sometimes it seems that banks and credit card companies almost encourage their customers to overspend and max out their cards. After all, if the customer gets in the financial tight spot, it’s up to him to make good on his obligations to the bank – not the other way around.

One of the main consequences of overspending and not being able to make your payments is the negative effect it can have on your credit rating. In order to address this issue, many financial institutions have specialized in a service called credit repair – and large part of that service has to do with consolidating credit card debt. This is a financial move that most of us will be familiar with, if only in theory. Simply put, credit repair through credit card debt consolidation involves merging all the outstanding debts and payments a customer might have that are spread out on several credit cards and credit card companies, paying them off with one new loan, and than paying out the new loan at a much more manageable terms. There are several advantages to this credit repair approach.

First of all, credit repair through debt consolidation enables you to take care of your outstanding debt at a much lower interest rate (when compared to the interest rates most credit card companies charge, especially when you are “in the red” and overdue on your payments).

Secondly, once you start with the credit repair procedure, your account will go through an “re-aging” process. This means that your account is no longer flagged as overdue and in the red, and that the from the bank’s perspective, you no longer own anything and should be able to apply for new financial services or loans. In addition, you will be rid of the often outrageous late payment fees that so many banks and credit card companies impose. The credit repair programs eliminate this threat so you can actually pay what you owe instead of having to deal with more and more late payment fees.

And finally, credit repair services can buy you some time, and in some situations, this can be more valuable than the money itself. Being able to decide, based on your current financial situation and prospects, if you would rather pay more over the course of several months, or less over the course of weeks is invaluable, and credit repair services can give you that freedom to choose once again.

Credit repair services and credit card debt are definitely something to consider if you find yourself overwhelmed by having to deal with servicing several outstanding debts at the same time.