Credit Crunch - Can you get out from under it?

If you’re concerned you won’t qualify for a lease, we believe that these fears can be easily overcome.

There are leasing agents/companies that have in house credit repair departments who will work with you to clean up your credit score and rating. After all, it’s in their best interest to do so. They want to do the deal…that’s how they make money. Next to that, they aim to provide comfort for their lenders to get paid every month. This is a very good option and well worth looking into.

If you don’t want to use their services and would rather handle the issue yourself, before you apply for a lease you have some choices:

Negotiate with your Credit Card Company;

Negotiating with a credit card company is not impossible to do. However, you must remember that they have company guidelines and their primary objective is to collect what is owed to them.

Many credit card companies have become flexible with adjusting the monthly payment they will receive due to the current state of our global economy. However, there is no guarantee that they’ll work with you. It will largely depend on what kind of customer you’ve been in the past.

When you contact your credit card holder stress the fact that you have been a model customer and that this is a temporary measure, and that you have every intention of living up to your obligations. Ask for a reduction to your interest rate so that you can actually make progress with paying off the debt. If they’re stubborn and won’t help you, ask to speak with their supervisor or be passed onto a department that can help you.

Debt Consolidation with a Home Equity Loan;

If you own your home and have available equity you could approach your lender to consolidate your debt and roll it into your mortgage. The lender will likely give you a blended rate but check out all your options. Don’t be afraid to talk to your lenders. They don’t want to lose your business. If they can work with you they will.

Credit Counseling Companies;

Consider working with a well known credit counseling service. Only use a reputable firm, preferably a not-for-profit company - check them out thoroughly! Lately, several stories are surfacing in the news about people paying so called “debt reduction” companies who pocketed their monthly payments due to the creditors/lenders.

A reputable credit counseling firm will negotiate directly with your lenders to get you lower interest rates and lower your monthly payments. They will collect money from you each month and pay your lenders. More often than not, a good credit counseling company can help you pay off your debt in just a few years rather than over a much longer period of time. This will save you a ton of money in the long term. What's more, they’re not establishing a new loan, but helping to repay what you already have in place.

Bankruptcy;

As a last resort you could opt for bankruptcy. This is probably not the preferred course of action; however, it will give you a manageable way to repay some of your unforgivable debts, even if you lose most of your assets. The terms of your bankruptcy will depend on your regional bankruptcy laws. Speaking with a local trustee will normally get you the answers to all of your questions.

Unfortunately, going this route, there really isn’t anything you can do to save your credit rating from disaster. Take heart though, over time it will get better and until then you will be considered a much higher credit risk and you’ll likely have to pay a higher interest rate on some things (for a while). But don’t let that stop you from leasing the item you want or need. Our recommendation would be to first speak with the leasing company’s in-house credit repair dept. and from there (if necessary), you can accurately determine the next best course of action.

Have you ever tried negotiating your debt? Have you ever used the services of a leasing company's in-house credit repair department?

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