‘I’m starting to have second thoughts as it will dramatically affect my credit’: I have debt and a potential solution, but will it ruin my credit?

Hi Money Minder,

So like, I’m in a bit of a pickle with my debt situation. I signed up with Nation Debt Relief a while back and have been making monthly payments towards lowering my debt. But now I’m having doubts because it could really mess up my credit and leave me without a credit card for emergencies.

Right now, my total debt is $8,913, but with the program, it’s lowered to $7,915. I’ve already put in $1,121, which I can get back since it’s still early days. I have $4,000 in savings that I really don’t want to touch, but at the same time, getting out of debt sounds nice. What should I do? Keep going with the program and take a hit on my credit, or get my money back and pay it off myself?

Thanks for the help!

Sincerely,
Debt Dilemma Guy

Response from THE MONEY MINDER:

"Hello There,"

Congratulations on taking steps to address your debt situation. It sounds like you’ve put a lot of thought into the decision to use a debt relief program, and it’s completely understandable to have concerns about its impact on your credit score and financial flexibility.

In your case, with a total debt of $8,913 and a reduced amount of $7,915 through the program, along with $1,121 already paid and the option to get your investment back, it’s essential to weigh the pros and cons carefully. It’s great that you have savings of $4,000 that you’d like to keep untouched, and considering whether to use some of it to pay off the debt is a valid option.

First and foremost, I would recommend evaluating your budget and financial goals. It might be worth exploring different strategies, such as paying off the debt on your own with a structured plan that fits your current financial situation. This approach could potentially help you maintain your credit score and avoid the impact of a debt relief program.

However, if you decide to continue with the relief program, it’s important to understand the potential consequences. While it may lead to being debt-free in a shorter time frame, it could also impact your credit score and limit your access to credit in the future. Taking these factors into consideration, it’s crucial to make an informed decision that aligns with your long-term financial objectives.

Ultimately, the best course of action will depend on your individual circumstances and priorities. You may want to consult with a financial advisor or credit counselor to explore all your options and determine the most suitable approach for your situation. Remember, the goal is to achieve financial stability and peace of mind. All the best from THE MONEY MINDER.