Debt Reduction

Hi Cherry

Welcome to the forums. Though you might be clear between the difference between debt reduction and debt consolidation, debt reduction programs reduce the principal amount of your debt and make it easier for the consumers.

Please be informed that companies offering debt reduction programs do not report to the credit bureaus. Your account information is sent by your creditors after you complete your payments. So, it is necessary to negotiate with your creditors in a fair way to acquire better ratings.

Debt reduction programs do not appear as the best in your credit report. Your accounts will appear as ???open delinquency' because you have not made regular payments to your creditors.

Debt reduction programs offers solution by negotiating with your creditors and the remarks of late payments will stop after enrollment in the program. After you have paid the negotiated or the reduced amount, your account will be shown as ???settled in full'

Debt reduction programs improve the debt to income ratio by eliminating your share of debt which is researched by the creditors to analyze your credit worthiness. Your credit report will show that you have used the debt reduction program and the creditors in future will view it as a concerted attempt to solve your debt related problems instead of filing for bankruptcy.

Debt reduction or debt settlement programs are used to prevent bankruptcy. So, all stress is given to the fact that you clear your debt as soon as possible instead of filing for bankruptcy. In such cases, your credit eligibility should be a secondary factor.

http://www.debtconsolidationcare.com/debt-reduction.html

Regards
Roxette