Credit Repair, Debt Consolidation, Or Debt Relief - Which?

You check your debt picture in 10 minutes with The Credit People's credit report and FICO score services. You spot debts, score impacts, and issues fast. This baselines your choice among credit repair, debt consolidation, or debt relief.

1. Visit The Credit People. Sign up for instant credit report and FICO score access.
2. Scan accounts. Note balances, types (medical, credit card, student), and statuses.
3. Total unsecured debts. Add monthly minimum payments.
4. Flag negatives. Count late payments, collections, inquiries.
5. Jot score. Compare to 670+ for best options.

• You use credit repair to dispute errors and negative items on your credit report, improving your score without affecting debts directly (best for inaccuracies, not high balances).
• You choose debt consolidation to combine multiple debts into one loan or payment, simplifying finances and potentially lowering interest rates (suits unsecured debts like credit cards under $50,000).
• You opt for debt relief via settlement to negotiate reduced principal on debts, or a debt management plan to reorganize payments at lower interest without cutting principal (ideal for overwhelming unsecured debt).
• Credit repair shows fastest score gains (1-3 months) but ignores debt amounts; consolidation and relief target payments directly.
• Consolidation preserves credit better than relief, which may hurt scores short-term from missed payments.
• Pick based on your debt type: repair for errors, consolidation for good credit, relief for hardship.

Your credit score reacts differently to credit repair, debt consolidation, and debt relief depending on your debts and actions. Credit repair targets errors without new loans. Debt consolidation often uses a new loan. Debt relief involves negotiating payoffs.

• **Credit Repair**: You dispute inaccuracies and old negatives. Your score improves (often 50-100+ points) as valid items drop off after 7 years. No new inquiries.
• **Debt Consolidation**: You take a new loan, adding 1 hard inquiry (drops score 5-10 points temporarily). It lowers utilization and simplifies payments, raising score over time if you pay on time.
• **Debt Relief**: Settlement marks accounts "settled" or "charged-off," hurting score significantly (100+ points drop possible). Negative status lingers 7 years, but no hard inquiry from settlement itself.

Find which option fits your debt type and amount

You match your debt type and amount to credit repair, debt consolidation, or debt relief by evaluating factors like accuracy of negatives, your creditworthiness, interest rates, income, and tax risks. Choose credit repair if your report shows inaccurate or unverifiable items (accurate negatives stay). Pick debt consolidation for high-interest unsecured debts like credit cards or medical bills, but only if your credit score qualifies you for favorable loan terms (not ideal for secured or student loans).

Opt for debt relief programs like settlements if debts overwhelm your budget, especially unsecured amounts you can't consolidate (tax forgiven debt as income; expect credit hits). Your credit score, debt mix (e.g., $15k credit cards vs. $40k mixed), and goals decide best fit - no fixed thresholds work universally.

• You owe $25k in medical debt from emergency surgery. Credit repair challenges billing errors (optimistic 20-30% reduction if inaccuracies found; accurate info stays). Debt consolidation spreads payments at your rate. Debt relief negotiates settlements (not guaranteed).
• Your $18k credit card debt carries 24% interest. Credit repair disputes verifiable errors only (late payments stay if accurate). Debt consolidation lowers rate if credit qualifies (varies by score). Debt relief settles for less principal.
• You hold $40k federal student loans at 5-7% rates. Credit repair fixes report errors (no late payment removal). Debt consolidation weights averages (often no savings, rounds up). Debt relief explores forgiveness programs situationally.

You decide between credit repair, debt consolidation, and debt relief in 3 steps by matching your goals and timeline.

Step 1: Identify your primary goal.
You seek score boosts with credit repair if disputing errors. You want lower payments with debt consolidation for revolving debt. You pursue settlements with debt relief for unsecured debt you struggle to pay.

Step 2: Assess your timeline tolerance.
You pick credit repair for results in a few months to a year or more, depending on issues and bureau response. You choose consolidation for typical 24-60 month terms that vary by loan. You select relief for processes often 12-36 months or longer in complex cases.

Step 3: Match option to your situation.
You align credit repair with good debt payment ability but score drags. You fit consolidation to steady income for larger debts. You go with relief if facing hardship and potential default.

You sign up with your chosen provider for credit repair, debt consolidation, or debt relief. You submit documents like ID, debt statements, and credit reports. Your provider reviews everything and begins work within days (credit repair disputes first items; consolidation funds your loan; relief enrolls debts).

You track progress monthly via portals or apps. Expect credit repair fees of $50-150 flat monthly or $25-100 per deletion. Debt consolidation adds 1-8% origination fees, varying by lender. Debt relief charges 15-25% of enrolled debt. Results appear in 1-6 months, depending on your debt amount and type.

You face backfired consolidation when monthly payments exceed your budget, fees eat gains, or you rack up new debt. High-interest loans or poor terms worsen it, especially with credit card or medical debt over $10,000.

Contact your lender first. Ask about forbearance, hardship programs, or modifications, if eligible per their policies. Not all offer these; your situation decides.

Explore debt relief next, like settlement or management plans suited to your debt type. Renegotiate terms or seek a better consolidation loan. Skip credit repair here; it boosts scores but ignores your unaffordable payments.