If you’re in over your head in debt it may seem logical to not pay it. If you can get debt relief, by all means you should take it, right?
Not paying your debt is much worse than paying it off as agreed. Even if you need a credit counselor to intervene on your behalf, get you lower rates, or a payment arrangement, as long as you pay the debt, it’s a lot better for your credit.
Not Paying your Debt Hurts your Credit Score
A big part of your credit score is your payment history. If you don’t pay your debt, you don’t have a payment history and you defaulted on an agreement, both are bad for your credit.
You want to show that you’ll make good on your debt even if it’s at a negotiated rate or a different arrangement. Even a remark on your credit report ‘paid as arranged’ is better than not paying your debt at all.
A Credit Counselor Arranges for Lower Interest Rates
Chances are that you are in debt because the interest keeps accruing. The minute you don’t pay the balance in full, interest accrues, and then interest accrues on top of that and it keeps going.
If the rates are 20%+, it’s impossible to get ahead of the debt. This is when most people throw in the towel and work with a trustee to ‘get rid of the debt.’
Instead, a credit counselor arranges for lower interest rates, sometimes as low as 0%. This leaves you much more room to tackle the principle, pay your debt as agreed, and get out of debt.
You Show Financial Responsibility Paying your Debts
Everyone gets in over their head sometimes. But it’s how you treat it that matters. If you just bail out of the debt, it doesn’t show financial responsibility. You show that you run when the going gets tough and credit bureaus and lenders don’t’ like that.
If you stick with your debts and turn to a credit counselor for help, you show financial responsibility. You tell the credit bureaus that you’re willing to make good on your agreement even if it’s at a negotiated rate. The payments will help you build a credit history, a good reputation, and a better credit score.
It can be overwhelming to be stuck in debt, but it doesn’t have to be. Writing your debt off, though, is one of the worst decisions you can make. It will hurt your credit and make it difficult to get credit in the future.
Instead, contact Creditaid and get a free credit consultation. We’ll tell you how we can help you make your debt ore manageable yet not overwhelming. With our services, we can help you get lower interest rates to pay your principal off and not pay as much interest. Contact us today for your free consultation.