If you are drowning in debt, and you are serious about doing something to end your financial problems, then you will need to decide where to focus your efforts.

You should decide, do I want to eliminate my debt or rebuild my credit? For most people with too much debt it's impossible to achieve both at the same time.

The truth of the matter is if you are carrying a lot of debt, and are near, or at your credit limits on your credit cards while only making your minimum payments, then your credit is going nowhere but south. If you don't believe me, then go to your bank and ask for a consolidation loan to pay off your debt. Chances are the answer is, "no".

To put it in a simple way and using $40,000 of various unsecured debts as an example. Ask yourself, would you rather be:

1. Completely debt free in 3 years with bruised credit.

            or

2. Still owe $40,000 in 3 years with below average credit.

Scenario number 1 illustrates what happens when you successfully complete a debt settlement program, and scenario number 2 reflects what would happen if you tried to continue to make minimum monthly payments or used credit counselling.

The latter would actually make your credit rating even worse then settling your debt. Also in scenario number 2, minimum payers, on average, can expect to take 15-30 years to pay off their credit card debt and end up paying about 3-5 times what they owe today in total due to interest. If left unchecked, that $40,000 in debt could easily take over $125,000 to pay off over a period of 25 years, with no significant improvement in your credit score until it's all paid off.

The problem is the majority of the population would focus on the importance of credit over getting rid of their debt. They don't want to ruin their credit. And that exactly what keeps people in debt. Which is coincidentally, what generates profits to creditors.

Ask yourself this, if your house was burning down would you really care about the damage to your garden by the fireman's boots?  You can grow your garden back, the same is true with credit.

What I am trying to demonstrate is credit really isn't that important if you are drowning in debt. It's the welfare of your family that should come first. All that your credit got you in the first place was a bunch of debt. When you have a ton of debt, you can't get new credit anyways. So ask yourself this. If you have all this debt you can't afford, and are going nowhere fast with it. What do you really need credit for right now anyways?

The truth is credit is actually very easy to rebuild once you got rid of your debt. I have personally seen credit scores jump over 100 points a few months after a debt settlement plan is complete. And that can be accelerated even further by using a secured credit card responsibly.

Take a good look at a debt settlement solution if you are serious about eliminating your debt. It's not going to be the right solution for everyone, but it can help you avoid bankruptcy and get debt free fast with less damage to your credit then bankruptcy or credit counselling.

Credit Debt News

For most people using debt settlement, they should expect to get out of debt in 1-3 years if they follow the program. Even using a 3 year plan as an example, the total cost of the program including all fees and settlements, should be about 30-40% less then what is owed today.

Credit card debt without bankruptcy