Bad Credit Agency

What are services normally associated with a credit repair/debt settlement company?

Public Comments

1. Avoid credit repair agencies that charge a fee to improve your FICO score by removing negative, but accurate, information from your credit reports. No one can force credit reporting agencies or lenders to remove accurate information from a credit report. Credit repair companies often take your money without delivering what they promise, or provide only temporary improvements of your score, sometimes by removing accurate information that will reappear later Credit Counseling If you’re not disciplined enough to create a workable budget and stick to it, can’t work out a repayment plan with your creditors, or can’t keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But be aware that just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which may be hidden, or pressure consumers to make large “voluntary” contributions that can cause more debt. Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions. Hope this has been of help.
2. Never go to a debt settlement company. A debt settlement company (not a non profit CCCS) will tell you to stop paying everything to your creditors and have you send them $ every month. They will send letters to your creditors telling them to stop calling you, which by the way aren't valid and you will still get called, and let your accounts and credit get worse and worse. See the way they get their negotiating power is by letting your accounts charge off or nearly charge off. Then the settlement company will offer like 20 cents on the dollar to settle. When you add up all the money you pay the settlement company compared to what they end up actually paying your creditors, you are usually paying them thousands of dollars needlessly. You can do the exact same thing a settlement company can do. Just stop paying your bills and sock the money away for a year, then go settle - you'll get the same result and do the same damage to your report in the process. Never, ever go to a debt settlement company!