Restoration of Your Credit

We are often asked �what is going to happen to my credit report, while I am in this program.� The answer is simple, in the short term, when you sign up with a debt reduction program, your credit, if it has not already gone down, will go down, while we are in the process of negotiating settlements with your creditors.

However, in the long term, your credit will begin to restore itself, once settlements are being paid for. For example, let�s say you have 5 credit cards, totaling $40,000:

• Credit card A, you owe $15,000
• Credit card B, you owe $10,000
• Credit card C, you owe $ 7,000
• Credit card D, you owe $ 5,000
• Credit card E, you owe $ 3,000

All of these credit cards are showing up on your credit report as being late. However you have decided to put $800 per month towards paying off this debt. If we negotiated credit card E down from $3,000 to $1,200, we would make that settlement money, pay off the creditor the $1,200, and within 60 days, this transaction will show up on your credit report as a $0.00 balance owed with that creditor.

Next, we negotiated and settled credit card C, for $3,000. Once the money is in your account to pay that creditor off, this is now going to show up on your credit report within 60 days as having a $0.00 balance. You can begin to see the big picture now. As your money is going in each month to make settlements with your creditors, your credit report is starting to repair itself with these $0.00 balances showing up.

Then, let�s suppose you took out a secured credit card. A secured credit card, like a bank CD, is a credit card that you put money into from the beginning, say $500 or $1,000. The creditor will then issue you a new credit card whereby you cannot pass these limits. However it works exactly like any other credit card. As long as you are paying it back on time each month, you are restoring your credit by itself.

Combine this with maybe a secured bank Certificate of Deposit (CD), whereby you put $1,000 into a CD, and borrow $1,000 against that CD, so long as you pay it back on time each month, your credit report is restoring itself.

We will get more into this as you progress through our program, however just know that not all is ruined, when you start up in our debt settlement program.