Very recently I was an observer at a debate where two groups of people were arguing for and against banning credit repair as a business. It made me think. What would the world feel like if there would be no credit repair agencies? How would it be, if the law demanded that no second person can assist anyone for credit repair in return of fees? Would this be a boon or bane?

The Benefits Of Banning Credit Repair Agencies

1. No scamming – the number of credit repair business scams are counted among the highest second only to online identify theft. This is because of the incredibly high target base. In the USA 1 in every 4 people are having trouble with their credit. Can you even imagine the number of people who need credit repair help? The more desperate they are, the more likely they are to fall for scams because they want to believe that there are shortcuts and quick solutions for their problems.

2. Better grasp on the subject – without any outside help, you would be forced to learn what credit repair entails and how to go about increasing (and maintaining) good credit scores. Like tax filing, people would try to know more about this subject and be good at it.

3. More responsible financial management – an outcome from learning about what influences the credit score negatively would induce people to behave more responsibly with their finances. They might be less inclined to spend without thinking about the repercussions.

The Downside Of Banning Credit Repair Agencies

1. Waste of time and effort – the credit repair process is time-taking and very cumbersome. In fact, more 80% of the people who avail of the services of credit repair agencies do so because they have no time to take care of this matter in their time.

2. Longer time to get results – credit repair agencies are paid to deliver certain outcome. This is why they take up the credit related problems with dodged determination. They are result-oriented. When people have to do their own credit repair, they would rarely pursue it with the same determination until and unless it reached a critical stage. In other cases, the scores would suffer because of lack of commitment and often time to pursue the process.

3. Lack of expertise would sabotage results – credit repair agencies offer much more than credit repair solutions. They negotiate with the creditors for better deals, they counsel people for better financial management, they liaison with creditors for best (new) loan terms, and so on. They are qualified, experienced and capable of taking up these tasks and doing the best possible. Not everybody can get best results on taking up such tasks without any experience or specific qualification to back them up.

4. Chaos would prevail – while it is possible that with time, people would become self-sufficient in this field as well the most probably outcome would be that there would be chaos in this aspect of finance management. Just like tax filing – where people take a lifetime to learn the best way to do it – credit repair too, would become a matter of deep concern and ulcers.

Overall, taking both the sides into consideration, I think I would prefer that credit repair agencies remain legal and within easy reach of anyone who needs them.

When you're burdened by bad debt, it becomes a major stress factor in your life. But try to see it as a "positive" rather than a "negative."

It's at this time that most people wake to the realization that financial discipline is one of the most important things they can master. It's at such a time that you will be motivated to make some of the best decisions regarding financial management.

Here are five steps that will help you become debt free.

1. Take stock of the situation. This means that you need to work out a budget and try as best as possible to maximize the amount of funds you have left on hand for payment of bills.

While making your budget, you need to minimize your expenses to a Spartan level, so that you can raise money for repayment of your debts. It's very important that you're able to close all your debt accounts to the satisfaction of your creditors.

2. Re-negotiate with your creditors. Most people avoid this solution because they are afraid they will be refused or worse, rebuked, or marked as bad debtors. But contrary to popular belief, most creditors will be willing to re-negotiate the terms of a loan in order to ensure their money will be repaid.

You need to convince them of the extenuating circumstances you're facing, and of the fact that you're eager to honor your commitment and repay the loan. The re-negotiation will greatly help the crisis by relaxing the most demanding of the terms.

3. Re-finance your debts. Let's look at the worse possible loans – credit cards and home mortgages. Credit card outstanding debts are especially bad, because the interest rates on these debts are in the neighborhood of a whopping 3 percent per month compound interest! Home mortgages are also bad, because they can lead to foreclosure and loss of your home.

You need to first see that these loans are repaid on schedule. Wherever possible re-finance these loans through creditors that offer better interest rates. Credit card payments can ruin you financially if not controlled in time.

4. Add to your income. This is often easier said than done, but it's another very important step towards becoming debt-free.

Ensure that your time is organized best, so as to allow you the time to take on a few extra jobs. This can be something on the Internet, a few errands in your neighborhood, a few hours per week overtime, and so on. Look closely at your budget, and work out a plan to add at least 25-35 percent to your income, so that you can extricate yourself from debt sooner.

5. Look up a reputable credit repair agency. There are many of them, online and off. Choose one that is affiliated with the Ethical Credit Repair Alliance (ECRA) so you can be assured of the highest quality of services. A credit repair agency will give you good advice and counseling regarding how best to handle your debt, but they will also help you keep your credit score high!