How would applying for a debt reduction program affect the c

Submitted by jayben on Wed, 10/14/2009 - 19:47

i'm in debt up to my eyeballs from unsecured personal loans and student loans. i'm barely able to keep up with my payments on the unsecured loan but am falling behind on my student loans. i need help otherwise my credit will go down the toilet.

what would happen if i applied for debt reduction? would it be more harmful to my credit than not making the payments on my loans?[/url]

Hi Jayben,

If you apply for debt reduction, debt settlement or debt consolidation program, then it will be listed in your credit report in that way. However, this listing will not be as harmful as not making the payments at all. I would suggest you to go for debt consolidation program since you are not able to pay off the debts.

After you opt for a debt consolidation program, the debt consultant will deal with the creditors on your behalf. After the debt is settled, your credit report will reflect the status in that way. Or else when you are going for debt reduction program, ask the consultant to request the lender about removing the negative item from your report through a pay for delete letter.

Thu, 10/15/2009 - 05:30 Permalink
Anonymous (not verified)

hey thanks justin i appreciate the advice. it makes sense and it should help out a lot in this journey

thanks again

Mon, 10/19/2009 - 20:33 Permalink
Sally Nachelle (not verified)

You can request your creditors for debt reduction. If it is not possible for you to negotiate with your creditors yourself, you may contact with a reliable debt settlement company and enroll in a debt settlement program. This debt settlement company will then work with your creditors on your behalf. A debt settlement program may help you to reduce your debt amount. Debt reduction will help you to improve your credit score. Debt settlement may hurt your credit score. But non-payment of debt hurts your credit score by 35%.

Wed, 06/01/2011 - 11:59 Permalink

It may or may not hurt your score. If someone inquires about your CR, the 'reduction' program will be on your credit (which may be a 'positive' thing for you because it will show you have only one payment going out instead of several payments). However,...if you try to apply for more 'credit' (CC's, etc), you will probably be denied because it's already showing you are under some kind of 'credit assistant' (if these make sense).

Sun, 06/05/2011 - 10:23 Permalink