Credit Repair and Debt Consolidation - What is the Difference?

When people get in trouble with overdue bills, they are introduced the harsh world of fancy financial jargon, quick fix solutions and promises, and a general overall sense of confusion and overwhelm as to which choices are the best. Let's take a closer look at some of two of the more popular phrases thrown around when trying to get your finances fixed and how they differ.

Credit repair and debt consolidation. Are they really different ways to saying the same thing, or are they wholly unrelated topics that just sound like they should be? They are closely related in some ways, yet still worlds apart in others.

This most often refers to the process of challenging negative items on your personal credit report, and placing the burden of proof on the credit bureaus to verify that the information is indeed, correct. Very simply, the basic protocol for this process has been laid out for many years in an often cited, yet highly misunderstood law called the FCRA - which is an acronym for Fair Credit Reporting Act. (The law has since been amended and recently renamed - but this is its popular name). Essentially you are ALLOWED to do this, regardless of what has happened in your past to cause your present crisis. Now that doesn't mean that your bad credit is going to magically dissolve into the warm, night air either) It just means, you are entitled to challenge the information and have them prove, or at least verify, that it is indeed true. I have written about this at far greater length in other articles.

Now, conversely, debt consolidation is usually a preemptive move people make PRIOR to needing credit repair. As a matter of fact, the whole point of consolidating your debts is to reduce your financial overhead and monthly obligations so that you don't mess up your credit. Often times people getting close to a crisis point with them, loans and even mortgage payments will opt for a debt consolidation loan to both reduce the total interest rate they are paying on all of their debt service. In this capacity, debt consolidation loans can be a lifesaver! Unfortunately though, the statistics point to the fact that for most people, it is a very temporary solution, only stalling more severe financial problems in the future.

Again, in boils down to having some strategy, vision and of course, good old fashioned responsibility, while not always fun, is pretty important to keep in mind. And don't' forget to keep learning about YOUR credit, knowledge is power and what you learn, regardless of what your finances look like, they can never take THAT away from you.

With the right information, everyone, including YOU, can fix their credit, quickly, easily and ethically with a minimum of muss or fuss. Don't let them tell you its too expensive, or too hard - it's not, self help credit repair is actually the most AFFORDABLE investment you can make in your families future!

You are Standing on the Threshold of a New Financial Future!

For more great insider information, secret videos and free downloads on how you can raise your credit score, easily, ethically and inexpensively, Click here to give yourself the gift of good credit this Christmas!