On the Brink: Debt Consolidation As a Last-Ditch Effort to Avoid Bad Credit
Contributed by Alix Mcmurray
On the Brink: Debt Consolidation As a Last-Ditch Effort to Avoid Bad Credit
When good credit hovers perilously on the brink of bad credit, it may be time to look into debt consolidation. But as with any relationship, particularly a financial relationship, you have to choose your friends wisely.
Debt Consolidation and Bad Credit -- Can You Be "Forgiven"?
Most folks have heard this expression as a song lyric: "The rich get richer and the poor get poorer...." Nowhere is this more true than in the world of credit. A hefty income excuses many things, even a poor credit history. Remember that your debt-to-income ratio along with your bill paying habits determine your credit standing. If you have abused or misused credit in the past -- gotten in a little over your head, shall we say -- that is one problem.
But not having the income to pay bills in a timely fashion is a problem which can stand apart from credit misuse. Ironically, credit misuse is more easily "forgiven" than low income.
Debt Consolidation and Debt Management -- A New Identity for Those with Bad Credit?
We've all seen those prison films where the convict is paroled and goes out to make a new life for himself. It's a fresh start. He's hoping the past won't catch up to him. But sometimes it's simply easier to take on a new identity than to engage in lifelong impression management. And there's nothing that can give a person a new "identity" faster than a well-paying job. However, the outlook is not so bright for those who approach debt management in the same old suit of clothes.
Many debt consolidation companies will look at your income first before any further negotiations can take place. You simply can't show up in the same old clothes and expect to be welcomed.
Baring All in the Bad Credit Debt Consolidation Interview
So, let's say you go to this "interview" (which technically is often simply over the phone)and you willingly bare all with regard to your money habits. You answer question by painful question how much you owe -- mortgage or back rent, credit cards and lines of credit, personal and business loans. Then you answer intimate questions about everything you spend your money on -- food, clothing, gasoline, entertainment, children, pets, even haircuts!
