Before using a credit repair services, check your credit report for any errors or inaccuracies. Request copies of your credit report from the three major credit bureaus. Review the reports carefully and look for any errors or incorrect information that may be listed. If you find discrepancies, contact the creditors to dispute them as soon as possible.
Negotiating with your creditors can help you reduce the amount of debt you owe and make it easier to pay off. Reach out to your creditors directly and explain your financial situation. Explain that you want to settle the debt and need a lower payment, reduced interest rate, or better terms on the mortgage. Many companies will negotiate with customers if they can see that you’re trying to be responsible about paying it off.
A debt management plan is an informal agreement made between you and a creditor to pay off your debts. In most cases, the credit repair services will handle the negotiations with your creditor on your behalf. They usually base the plans on a proportional repayment structure so you can pay off all of your debts in a timely and responsible way. Depending on the company, they may also be able to counsel you on developing better practices for managing your finances going forward.
Another way to reduce your overall debt is to speak with a credit counsellor or join a debt management program. Most credit repair services work by negotiating your debts with creditors such as banks or credit card companies, allowing you to pay them off on more favourable terms. A credit counsellor can also provide budgeting advice and help you create a plan for getting out of debt for good.
In drastic debt situations, you might want to consider either a consumer proposal or a bankruptcy process. A consumer proposal is a process where you arrange with your creditors to pay off only a portion of what you owe, and in exchange, they will forgive the rest of your debt. Bankruptcy is another more extreme option but can be helpful if all else fails. Speak to a financial professional to learn more about these processes and decide which one is right for you.