Debt Settlement Advice By Csi Mortgage

Debt Settlement Myth 1

For anyone considering bankruptcy, debt settlement is a good alternative. While debt settlement does get recorded on your credit report, it is usually considered less damaging to your credit than bankruptcy. Plus, with less debt, your credit can improve faster, and you'll have much more financial flexibility and "breathing room". For anyone behind on their payments, debt settlement is also a good option to consider. Since late payments are already considered a negative mark on your credit i.e. by paying an outstanding, delinquent debt you will change the account status to "paid collection," "paid was late," or "paid was charged off", which will stand out as a very negative listing, settling your debts allows you to finally pay off the debt.

For anyone who just has not made any progress paying off their debts, but still pays on time, debt settlement can be considered. While the process of settling debts does work against your credit score, so does a high amount of debt. So, keep in mind that the main benefit of debt settlement is to pay off your debt as quickly as possible, saving you money in both interest in principal, and allowing for greater financial flexibility.

Debt Settlement Myth 2

While the credit bureau is required to complete their reinvestigation in 30 days or less, the consumer has little recourse against them if they don't. Many consumers assume that the credit bureau must repair all disputed credit if the investigation isn't completed within the required time. This is not the case. The credit bureau may take as long as it likes to repair the credit. The only real recourse a consumer might have would be to gather a class-action lawsuit to penalize the bureau for taking too long. For example, it is common practice to receive the credit repair dispute letter, take a week or two to process it, then send the consumer a letter saying that the reinvestigation will begin on the date that the credit repair dispute was finally processed. This often gives them a total of six weeks from the date of receipt of the dispute to complete the reinvestigation.