As people begin looking for ways to get out of debt they will soon ask the question will debt management companies hurt my credit. What you have to consider here is the type of debt management company you are researching, because they are not all created equal and do not all work the same way. The truth is one type of debt management company will not have much of an impact on your credit, while the other type will impact it negatively.
The best way to pay off your debt is on your own. Make a plan, cut your expenses, increase your income and be disciplined about your credit card debt management. But unfortunately, this does not work for everyone. That leaves you with credit counseling, debt settlement or bankruptcy.
Credit counseling will allow you to repay your full balances and will have very little impact on your credit. Your interest rates will be reduced and possibly eliminated. This is a good plan for a person that is not more than a few months past due and can make a 2 percent minimum payment. You will make one payment a month to the credit counseling company and they will pay your lenders each month.
Debt settlement is an option that reduces your balances through a negotiation process with the lender. Anytime you are paying less than what is owed, your credit will be affected negatively. This is one of the quickest ways to get out of debt. You will have decide if this in your best interest. If it has been several months since you made a payment, your credit has already been negatively affected.
A bankruptcy will stay on your credit for up to 10 years. All credit can be rebuilt, but before you can rebuild it you have to find credit card debt relief. That is your first step. Will debt management companies hurt your credit...they can, but so can debt.
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