Posts Tagged Debts
Q&A: consumer credit counseling? Should I negotiate my debts independently, or use an agency?
Posted by admin in Consumer Credit Counseling on June 16, 2011
Question by Vicarious Cynic: consumer credit counseling? Should I negotiate my debts independently, or use an agency?
Personal experiences with Consumer Credit Counseling or Debt Management Plans appreciated. The credit score is nevertheless largely intact – but the month to month bottom line is thin – with a disproportionate amount of unsecured debt.
Best answer:
Answer by bdancer222
It is possible to negotiate better interest rates with some credit card companies but you will probably get much better ensue if you go thru a credit counseling company. Be sure to use a NFCC memeber: http://www.nfcc.org/. These are legit, non-profit credit counseling companies.
Know better? Leave your own answer in the comments!
Do Credit Counseling Agencies Help Or Hurt You?
Oscar Orihuela asked:
Credit counseling agencies are dime a dozen nowadays. There are new ones coming out each day offering to help those who are in debt. But are they really helping you out?
The plain and simple answer is….. it depends!
Many people believe that if you visit a credit counseling agency, your credit score immediately takes a hit. That is farthest from the truth. FICO, the leading scoring company, states that they do not factor these visits to your score.
FICO also stated the things they take into account. Here is a list of them:
Liens
Maxed Out Credit Balances
Judgements
Missed Payments
Late Payments
Just because you visited an agency doesn’t mean it wont go on your record, it will be on your credit report. If you apply for a loan, lenders can take that and look at it as a negative for you.
However, if you have looked for these kind of services and you used the information you got wisely. That is, you managed to pay off your debts and start making payments on time, your credit score will actually increase the note of you visiting the agency will be minor compared to the boost your score will get.
In either case, you should take a close list above. You should prevent from engaging in any of those activities. Your credit report is a very important to protect. However there are cases such as identity theft that one can’t help. This is where you should seek help and protection.
Do keep in mind that whenever someone else, other than you, checks your credit, you take a negative hit. You get points deducted from your credit score. Therefore you should get your own free credit report and then visit these kind of agencies. They will try to convince you to let them check your credit but say no. If a credit counseling agency doesn’t want to look at the documents you bring in, then they are most likely a sham and don’t care about you.
Michele
Credit counseling agencies are dime a dozen nowadays. There are new ones coming out each day offering to help those who are in debt. But are they really helping you out?
The plain and simple answer is….. it depends!
Many people believe that if you visit a credit counseling agency, your credit score immediately takes a hit. That is farthest from the truth. FICO, the leading scoring company, states that they do not factor these visits to your score.
FICO also stated the things they take into account. Here is a list of them:
Liens
Maxed Out Credit Balances
Judgements
Missed Payments
Late Payments
Just because you visited an agency doesn’t mean it wont go on your record, it will be on your credit report. If you apply for a loan, lenders can take that and look at it as a negative for you.
However, if you have looked for these kind of services and you used the information you got wisely. That is, you managed to pay off your debts and start making payments on time, your credit score will actually increase the note of you visiting the agency will be minor compared to the boost your score will get.
In either case, you should take a close list above. You should prevent from engaging in any of those activities. Your credit report is a very important to protect. However there are cases such as identity theft that one can’t help. This is where you should seek help and protection.
Do keep in mind that whenever someone else, other than you, checks your credit, you take a negative hit. You get points deducted from your credit score. Therefore you should get your own free credit report and then visit these kind of agencies. They will try to convince you to let them check your credit but say no. If a credit counseling agency doesn’t want to look at the documents you bring in, then they are most likely a sham and don’t care about you.
Michele
Credit Counseling Vs Chapter 13
Seamus McKenzie asked:
Credit counseling programs and filing for chapter 13 bankruptcy are both options for people who have found themselves consumed by uncontrollable debt. Both options help people restructure their debt so that it is more manageable, allowing payments to be within the debtors budget. There is also no property liquidation with either program. While there are a lot of similarities between the two options, there are some significant differences as well. Here is a breakdown of the two different programs.
To start with chapter 13 requires hiring a lawyer and going to court for a judgment. Your attorney will work to prepare papers to restructure your debts so that they are affordable to you. After documents have been prepared and agreed upon, a trip to court for a judgment is the next step. Most times interest rates will be frozen and sometimes some of the debt may be forgiven. Then, payments begin. Usually under chapter 13 you will pay each creditor individually, but sometimes a trustee might collect the money and disperse it. All parties are legally bound to the terms of the agreement, which means you must make payments and the creditors cannot decide down the road to defer from the terms.
Credit counseling programs do not include a lawyer or the courts. Instead you will hire and work with a credit counseling company. You will be assigned a credit counselor who will educate you on how to most effectively set up a budget and how to efficiently manage your finances. The counselor will be the person who works to negotiate with your current debtors. They will go to bat for you, so to speak, to negotiate repayment terms on your current debts. They work to lower interest rates, remove fees on your accounts and sometimes are even able to settle some of the debt owed. The company will then lump all of your debts into one and charge you a once a month affordable payment. They will then disperse the money on your behalf to your creditors.
One drawback with a credit counseling program is unlike Chapter 13, there is no legal documentation on terms that have been negotiated. It is basically an honor system. Although it doesn’t happen often, parties at a later date can decide not to honor the terms of the agreement.
Finally, chapter 13 generally costs more than credit counseling programs. Lawyer and court fees can add up. There are start up and monthly fees with credit counseling, but they usually do not surpass legal costs of chapter 13.
Kenneth
Credit counseling programs and filing for chapter 13 bankruptcy are both options for people who have found themselves consumed by uncontrollable debt. Both options help people restructure their debt so that it is more manageable, allowing payments to be within the debtors budget. There is also no property liquidation with either program. While there are a lot of similarities between the two options, there are some significant differences as well. Here is a breakdown of the two different programs.
To start with chapter 13 requires hiring a lawyer and going to court for a judgment. Your attorney will work to prepare papers to restructure your debts so that they are affordable to you. After documents have been prepared and agreed upon, a trip to court for a judgment is the next step. Most times interest rates will be frozen and sometimes some of the debt may be forgiven. Then, payments begin. Usually under chapter 13 you will pay each creditor individually, but sometimes a trustee might collect the money and disperse it. All parties are legally bound to the terms of the agreement, which means you must make payments and the creditors cannot decide down the road to defer from the terms.
Credit counseling programs do not include a lawyer or the courts. Instead you will hire and work with a credit counseling company. You will be assigned a credit counselor who will educate you on how to most effectively set up a budget and how to efficiently manage your finances. The counselor will be the person who works to negotiate with your current debtors. They will go to bat for you, so to speak, to negotiate repayment terms on your current debts. They work to lower interest rates, remove fees on your accounts and sometimes are even able to settle some of the debt owed. The company will then lump all of your debts into one and charge you a once a month affordable payment. They will then disperse the money on your behalf to your creditors.
One drawback with a credit counseling program is unlike Chapter 13, there is no legal documentation on terms that have been negotiated. It is basically an honor system. Although it doesn’t happen often, parties at a later date can decide not to honor the terms of the agreement.
Finally, chapter 13 generally costs more than credit counseling programs. Lawyer and court fees can add up. There are start up and monthly fees with credit counseling, but they usually do not surpass legal costs of chapter 13.
Kenneth
Credit Counseling – Signs That You May Need Help
Rick Munster asked:
Credit counseling is a viable option for those who are feeling the stress of being overwhelmed by debt. Credit counseling primarily offers assistance with working out a credit and debt repayment plan for an individual to gain control of their finances by creating a structured budget for an individual to follow. Credit counseling offers an individual the option to repay their debts, if needed, through a credit counseling debt repayment program. This is where the credit counseling organization becomes in contact with an individuals creditor to ask for lowered interest rates and for the credit provider to stop any late and over the limit fees that may be attached to a particular credit card.
Credit counseling organizations that provide a no charge credit and money management education program for an individual typically have the individual consumer’s best interest on their mind.
Credit counseling may be needed if the following signs are present:
1. Are you using more and more of your income to pay your debts?
This becomes a problem if you are at the point where the money going out is less than or nearly less than the money coming in. Credit counseling would be a wise choice. Speaking to a credit counseling organization at this point can help because in a counseling session you may find that by sticking to a sound budget you may be able to avoid additional help. The best part is the counseling sessions should be at no charge, make sure of that before speaking to an agency.
2. Do you make only the minimum payments due on your loans and credit cards each month?
Look at your budget, that is review what dollars are coming in and how those dollars are going out. You may find that by tweaking your budget you may be able to avoid credit counseling by implementing a plan of savings through following your own plan. This should allow you to free up more money to be more aggressive in repaying your debt. Credit counseling may be needed if you have reviewed your budget and can’t find additional funds to pay more than the minimum amounts to your credit cards. Paying only the minimum to your credit cards will only prolong the length of time needed to repay your debt. Some credit cards may charge such a high interest rate that it could take years upon years to pay off with minimum payments.
3. Are you near, at, or over the credit limit on your credit cards?
Once a credit card is nearing it’s available balance or even worse if the credit card is over it’s credit limit it is time to take aggressive action to pay down the balance. If this is a situation you are finding yourself in try finding additional dollars to bring your balances down. It is recommended that when doping this you do not open another credit account or take a consolidation loan to repay these accounts as more often than not taking a loan to pay a loan will result in more debt being owed. If you can’t find the dollars to apply towards the credit cards try speaking to a credit counseling organization. They may be able to lay out a plan for you to repay the debt on your own, or through their own credit counseling services.
4. Are you paying your bills with money intended for other things?
If you find yourself “robbing Peter to pay Paul” with your credit cards it may be acceptable if you are replacing the dollars that are going to unnecessary items such as cable TV., cell phone payments…etc. Just as long as those accounts have been paid and you are not accruing any more fees from them. However if you find yourself using dollars that are intended for necessary items such as a car payment, a house loan, food, etc. then you are most likely in a situation where credit counseling is an option you may need to look into. Look at speaking to a certified credit counselor that will offer a solution to your financial needs. Getting out of the red is very important, the sooner you take action the better.
5. Are you borrowing money or using credit cards to pay for things you used to buy with cash?
This can be very problematic when you are utilizing your credit to purchase things like groceries, fuel or other disposable goods. If you are currently in the act of doing this review your finances to determine if you can avoid making these purchases with your credit. If this can’t be avoided try speaking to a credit counseling organization. They should be able to give you the tools needed to avoid this costly practice.
6. Do you often pay your bills late?
There are a few reasons on why an individual may frequently pay their bills after the due date. One of the main reasons is that there isn’t a budget in place to follow, therefore rendering the payments of the debt to the instance of when a person gets paid. If a payment is due on the 25th and a individual is paid on the 30th this typically develops into a past due payment. This is due to the fact that the majority of people live from one paycheck to the next. Creating a savings account and a budget plan will resolve this issue for the most part. Paying bills late on a regular basis may also be attributed to an individual being upside down with their debts, meaning that there is more money going out regularly than coming in. Once this point is reached it may be time to speak to a credit counseling organization. It is urgent to seek help at this point in order to order to avoid long lasting damage to your credit.
Regardless of your situation it is important to seek help when feeling the pinch of being upside down or behind with your finances. Taking measures early will result in less dollars that go out in the long run. Taking action early will also result in a lesser need of bankruptcy which has long lasting negative impact on your credit worthiness.
Jessie
Credit counseling is a viable option for those who are feeling the stress of being overwhelmed by debt. Credit counseling primarily offers assistance with working out a credit and debt repayment plan for an individual to gain control of their finances by creating a structured budget for an individual to follow. Credit counseling offers an individual the option to repay their debts, if needed, through a credit counseling debt repayment program. This is where the credit counseling organization becomes in contact with an individuals creditor to ask for lowered interest rates and for the credit provider to stop any late and over the limit fees that may be attached to a particular credit card.
Credit counseling organizations that provide a no charge credit and money management education program for an individual typically have the individual consumer’s best interest on their mind.
Credit counseling may be needed if the following signs are present:
1. Are you using more and more of your income to pay your debts?
This becomes a problem if you are at the point where the money going out is less than or nearly less than the money coming in. Credit counseling would be a wise choice. Speaking to a credit counseling organization at this point can help because in a counseling session you may find that by sticking to a sound budget you may be able to avoid additional help. The best part is the counseling sessions should be at no charge, make sure of that before speaking to an agency.
2. Do you make only the minimum payments due on your loans and credit cards each month?
Look at your budget, that is review what dollars are coming in and how those dollars are going out. You may find that by tweaking your budget you may be able to avoid credit counseling by implementing a plan of savings through following your own plan. This should allow you to free up more money to be more aggressive in repaying your debt. Credit counseling may be needed if you have reviewed your budget and can’t find additional funds to pay more than the minimum amounts to your credit cards. Paying only the minimum to your credit cards will only prolong the length of time needed to repay your debt. Some credit cards may charge such a high interest rate that it could take years upon years to pay off with minimum payments.
3. Are you near, at, or over the credit limit on your credit cards?
Once a credit card is nearing it’s available balance or even worse if the credit card is over it’s credit limit it is time to take aggressive action to pay down the balance. If this is a situation you are finding yourself in try finding additional dollars to bring your balances down. It is recommended that when doping this you do not open another credit account or take a consolidation loan to repay these accounts as more often than not taking a loan to pay a loan will result in more debt being owed. If you can’t find the dollars to apply towards the credit cards try speaking to a credit counseling organization. They may be able to lay out a plan for you to repay the debt on your own, or through their own credit counseling services.
4. Are you paying your bills with money intended for other things?
If you find yourself “robbing Peter to pay Paul” with your credit cards it may be acceptable if you are replacing the dollars that are going to unnecessary items such as cable TV., cell phone payments…etc. Just as long as those accounts have been paid and you are not accruing any more fees from them. However if you find yourself using dollars that are intended for necessary items such as a car payment, a house loan, food, etc. then you are most likely in a situation where credit counseling is an option you may need to look into. Look at speaking to a certified credit counselor that will offer a solution to your financial needs. Getting out of the red is very important, the sooner you take action the better.
5. Are you borrowing money or using credit cards to pay for things you used to buy with cash?
This can be very problematic when you are utilizing your credit to purchase things like groceries, fuel or other disposable goods. If you are currently in the act of doing this review your finances to determine if you can avoid making these purchases with your credit. If this can’t be avoided try speaking to a credit counseling organization. They should be able to give you the tools needed to avoid this costly practice.
6. Do you often pay your bills late?
There are a few reasons on why an individual may frequently pay their bills after the due date. One of the main reasons is that there isn’t a budget in place to follow, therefore rendering the payments of the debt to the instance of when a person gets paid. If a payment is due on the 25th and a individual is paid on the 30th this typically develops into a past due payment. This is due to the fact that the majority of people live from one paycheck to the next. Creating a savings account and a budget plan will resolve this issue for the most part. Paying bills late on a regular basis may also be attributed to an individual being upside down with their debts, meaning that there is more money going out regularly than coming in. Once this point is reached it may be time to speak to a credit counseling organization. It is urgent to seek help at this point in order to order to avoid long lasting damage to your credit.
Regardless of your situation it is important to seek help when feeling the pinch of being upside down or behind with your finances. Taking measures early will result in less dollars that go out in the long run. Taking action early will also result in a lesser need of bankruptcy which has long lasting negative impact on your credit worthiness.
Jessie
Commercial Credit Counseling
Greg Chambers asked:
Commercial credit counseling are services designed to help businesses with their finances and troubles with debt. Unlike traditional counseling for individuals, these commercial services will usually come at a cost, although they will provide similar counseling services to help businesses ensure their financial security. This includes budget management advice and ways of consolidating current debts, helping you make sure you can pay everything you need to.
In order to get the best results, it pays to do some research as to the credit counseling service you will use. It’s important to compare as many companies as possible, especially since you could be paying them a fee of around 10% of your total debt. Make sure you get recommendations from other businesses if possible – choosing a good counseling service will mean that you stand the best possible chance of regaining financial security.
To be successful it is a good idea to search for a business credit counseling service that specializes in commercial money management. Also look for a company that has many means at their disposal to improve your finances. Not every commercial credit counselor is the same and this is why your research should also take into account the exact services they offer and the principles by which they work to help businesses.
Once you do come across a commercial credit counseling service, it will take time to repair your debt and get your business back on track. However, taking the time to choose the best counseling agency available will greatly increase your chances of success, and help to get things back on track a lot quicker.
Ellen
Commercial credit counseling are services designed to help businesses with their finances and troubles with debt. Unlike traditional counseling for individuals, these commercial services will usually come at a cost, although they will provide similar counseling services to help businesses ensure their financial security. This includes budget management advice and ways of consolidating current debts, helping you make sure you can pay everything you need to.
In order to get the best results, it pays to do some research as to the credit counseling service you will use. It’s important to compare as many companies as possible, especially since you could be paying them a fee of around 10% of your total debt. Make sure you get recommendations from other businesses if possible – choosing a good counseling service will mean that you stand the best possible chance of regaining financial security.
To be successful it is a good idea to search for a business credit counseling service that specializes in commercial money management. Also look for a company that has many means at their disposal to improve your finances. Not every commercial credit counselor is the same and this is why your research should also take into account the exact services they offer and the principles by which they work to help businesses.
Once you do come across a commercial credit counseling service, it will take time to repair your debt and get your business back on track. However, taking the time to choose the best counseling agency available will greatly increase your chances of success, and help to get things back on track a lot quicker.
Ellen
Main Reasons For Credit Counseling
Troy Burton asked:
Nowadays, many people are involved in different kinds of debt problems. Some are having difficulty in understanding their account status while there are others who are having intricacy in making decisions to settle their credit balance. As a result, credit counseling became popular and effective in helping those individuals who are in need regarding debt matters. Counseling services plays an important role to people who are in great need to solve their debt issues. It gives adequate education to people and share to them all necessary information that they must know in order to come up with the best decision and solution to their existing financial problems. This kind of service has been of great help to people in the past few years in solving their previous credit balances. There are times that we are out of the right track in managing our financial resources which greatly affects our credit status that is why we end up losing the good credit rating we had previously. However, there is always a solution in every problem that we are experiencing. As long are you are strong enough to face reality along with you difficulties. Just look for a reliable source of counseling services regarding your credit status and they will help you solve your debt issues then bring back the right path for you.
There are so many lending or financial companies who have credit counseling services. You can even avail them through the Internet. This is due to high demands from the public to fully understand everything about credits and its cost. As you can observed today, many people are getting out of control in using their credit cards leading to multiple debts and insufficient monthly payment resources. Keep in mind that creditors offer a certain interest rate that might be high for you considering your monthly income. But because of the desires for life’s comfort and luxuries, many of us tend to forget our own financial limitations. This is not an advisable practice. It must never become a person’s habit because it will only bring a lot of problem in the future most especially if you are spending beyond your financial capacity. Financial guidance entails proposal regarding proper budgeting and plans for debt management.
Credit counseling has an aim to find ways in decreasing all your monthly bills and interest rates. It will be easier for you to pay a lesser bill though it takes a longer period of time depending on the agreement you have with your creditor. It also helps a person to improve and attain a better credit rating. It is best to have counseling services before you will engage to any form of loans to ensure adequate knowledge about the financial advices necessary to make your debts manageable in the future. It is important that you know the advantages and consequences of your loans. Therefore seek for financial guidance to discuss these matters. Usually, credit counseling services include your previous credit balances in the negotiation to provide easier means and solutions to solve the existing debt problem. Everything in your account relies on the hands of a reputable, skilled and well informed financial adviser so it is very important to choose for the best counselor in town whom you will entrust your credit status.
Michael
Nowadays, many people are involved in different kinds of debt problems. Some are having difficulty in understanding their account status while there are others who are having intricacy in making decisions to settle their credit balance. As a result, credit counseling became popular and effective in helping those individuals who are in need regarding debt matters. Counseling services plays an important role to people who are in great need to solve their debt issues. It gives adequate education to people and share to them all necessary information that they must know in order to come up with the best decision and solution to their existing financial problems. This kind of service has been of great help to people in the past few years in solving their previous credit balances. There are times that we are out of the right track in managing our financial resources which greatly affects our credit status that is why we end up losing the good credit rating we had previously. However, there is always a solution in every problem that we are experiencing. As long are you are strong enough to face reality along with you difficulties. Just look for a reliable source of counseling services regarding your credit status and they will help you solve your debt issues then bring back the right path for you.
There are so many lending or financial companies who have credit counseling services. You can even avail them through the Internet. This is due to high demands from the public to fully understand everything about credits and its cost. As you can observed today, many people are getting out of control in using their credit cards leading to multiple debts and insufficient monthly payment resources. Keep in mind that creditors offer a certain interest rate that might be high for you considering your monthly income. But because of the desires for life’s comfort and luxuries, many of us tend to forget our own financial limitations. This is not an advisable practice. It must never become a person’s habit because it will only bring a lot of problem in the future most especially if you are spending beyond your financial capacity. Financial guidance entails proposal regarding proper budgeting and plans for debt management.
Credit counseling has an aim to find ways in decreasing all your monthly bills and interest rates. It will be easier for you to pay a lesser bill though it takes a longer period of time depending on the agreement you have with your creditor. It also helps a person to improve and attain a better credit rating. It is best to have counseling services before you will engage to any form of loans to ensure adequate knowledge about the financial advices necessary to make your debts manageable in the future. It is important that you know the advantages and consequences of your loans. Therefore seek for financial guidance to discuss these matters. Usually, credit counseling services include your previous credit balances in the negotiation to provide easier means and solutions to solve the existing debt problem. Everything in your account relies on the hands of a reputable, skilled and well informed financial adviser so it is very important to choose for the best counselor in town whom you will entrust your credit status.
Michael
Credit Counseling – Do Debt Settlement Companies Honestly Help Consumers?
Matt Rayan asked:
In this century, many people want to use credit cards for shopping and paying bills but they fall in great difficulty when they cannot afford high amount of debts, which they have withdrawn from their credit cards. The rich people, who have high status, can easily pay their credit card amounts but those people, who are not rich, cannot pay their amount of debts. So, they have to search for the ways, from which they can get relieve from their outstanding amount of debts. Thus, many credit cards settlement companies are available for all the credit card debtors.
In these days, some settlement companies are offering their best services such as credit counseling, to all those debtors who have large amount of debts. These companies are specially working to give relieve in the outstanding amount of debts. But, the point is that do the debt settlement companies honestly help the consumers. We have a perfect answer that if the debt Settlement Company is well established, then it will provide the best services to all the people. You have to be sure while choosing this company that the settlement company. The reliable company provides full information and all contact details because if they do not provide all the necessary things, then it might be a fraud company. Beware of these types of companies because these companies only want money from all debtors. This act of these companies destruct the economical and personal life of the people who want to get relieve from their high amount of debts. These settlement companies do not help the consumers honestly. But those companies, who are popular and well-known, help all the consumers to eliminate their high amount of debts.
Credit counseling is the best service which is given by the credit settlement company. In this process, many professional people give advice to the debtors like how to choose any honest company and how to take the services of reduction on in the debt amount. In credit counseling, the debtors can get benefits in their debts because the credit Settlement Companies really help the consumers by giving reductions in the debtor’s whole amount.
If you are also suffering from the credit card debts and you want to get relieve, then you should avail the service of the credit counseling because some settlement companies truly help those consumers who under huge amount of debts.
Angela
In this century, many people want to use credit cards for shopping and paying bills but they fall in great difficulty when they cannot afford high amount of debts, which they have withdrawn from their credit cards. The rich people, who have high status, can easily pay their credit card amounts but those people, who are not rich, cannot pay their amount of debts. So, they have to search for the ways, from which they can get relieve from their outstanding amount of debts. Thus, many credit cards settlement companies are available for all the credit card debtors.
In these days, some settlement companies are offering their best services such as credit counseling, to all those debtors who have large amount of debts. These companies are specially working to give relieve in the outstanding amount of debts. But, the point is that do the debt settlement companies honestly help the consumers. We have a perfect answer that if the debt Settlement Company is well established, then it will provide the best services to all the people. You have to be sure while choosing this company that the settlement company. The reliable company provides full information and all contact details because if they do not provide all the necessary things, then it might be a fraud company. Beware of these types of companies because these companies only want money from all debtors. This act of these companies destruct the economical and personal life of the people who want to get relieve from their high amount of debts. These settlement companies do not help the consumers honestly. But those companies, who are popular and well-known, help all the consumers to eliminate their high amount of debts.
Credit counseling is the best service which is given by the credit settlement company. In this process, many professional people give advice to the debtors like how to choose any honest company and how to take the services of reduction on in the debt amount. In credit counseling, the debtors can get benefits in their debts because the credit Settlement Companies really help the consumers by giving reductions in the debtor’s whole amount.
If you are also suffering from the credit card debts and you want to get relieve, then you should avail the service of the credit counseling because some settlement companies truly help those consumers who under huge amount of debts.
Angela
Do You Really Need Credit Counseling?
Gregory McTaggart asked:
Being swamped in debt can really bring stress and emotional pain, and sometimes the best way to get through this situation is to seek credit counseling. A credit counseling agency can be a big help for people who are losing control over their finances. What can this service do for you?
A credit counselor can negotiate with your creditors for easier repayment terms or reduced monthly payment fees. In some instances, a counselor may suggest that the client enroll in a debt repayment plan.
Debt Repayment Plan and Counseling
What is a debt repayment plan? A debt repayment plan is when the credit counseling agency distributes the client’s monthly payments to the creditors along with negotiation. As a borrower, you will be submitting your repayments to your agency and the agency would be the one to pay off your creditors.
Under a debt repayment plan, debts with the highest interest rates are often paid off first to keep debts from further building up. However, bear in mind that enrolling in a debt repayment plan or debt management plan is not always applicable for everyone. Do you really need a credit counseling agency to do this? Would it be better to do repayment on your own?
Why Seek Credit Counseling
Carefully study your financial situation and weigh your options. What has led you to debt? Are you having difficulty controlling your spending habits? If the problem involves your personal spending habits, it may be a good idea to seek professional help from a counselor.
You’ll know it’s best to seek help from a legitimate and trusted credit counseling agency when:
* debt problems are starting to interfere with your family relationships
* lenders are denying you credit
* calls from your creditors are starting to upset you
* you find it hard to take control of the situation.
Once you have decided to obtain credit counseling services, see to it that you’ll be working with a legitimate and trusted agency. Some credit services could be fake. Even so-called non-profit agencies could take advantage of your problem if you’re not careful with your choice.
One way to check the reputation of a agency is to see if it’s a member of the National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).
You may also check from the Better Business Bureau and from your State Attorney General’s office if there has been any cases filed against the company and how these issues were resolved.
Once you’re sure that the agency is a legitimate one, know as much as you can about the services the agency provides. Inquire about the fees that you will be required to pay, what programs are offered, and what certifications the agency have.
Remember that an agency should not ask you to submit payment unless the services have already been provided.
Judith
Being swamped in debt can really bring stress and emotional pain, and sometimes the best way to get through this situation is to seek credit counseling. A credit counseling agency can be a big help for people who are losing control over their finances. What can this service do for you?
A credit counselor can negotiate with your creditors for easier repayment terms or reduced monthly payment fees. In some instances, a counselor may suggest that the client enroll in a debt repayment plan.
Debt Repayment Plan and Counseling
What is a debt repayment plan? A debt repayment plan is when the credit counseling agency distributes the client’s monthly payments to the creditors along with negotiation. As a borrower, you will be submitting your repayments to your agency and the agency would be the one to pay off your creditors.
Under a debt repayment plan, debts with the highest interest rates are often paid off first to keep debts from further building up. However, bear in mind that enrolling in a debt repayment plan or debt management plan is not always applicable for everyone. Do you really need a credit counseling agency to do this? Would it be better to do repayment on your own?
Why Seek Credit Counseling
Carefully study your financial situation and weigh your options. What has led you to debt? Are you having difficulty controlling your spending habits? If the problem involves your personal spending habits, it may be a good idea to seek professional help from a counselor.
You’ll know it’s best to seek help from a legitimate and trusted credit counseling agency when:
* debt problems are starting to interfere with your family relationships
* lenders are denying you credit
* calls from your creditors are starting to upset you
* you find it hard to take control of the situation.
Once you have decided to obtain credit counseling services, see to it that you’ll be working with a legitimate and trusted agency. Some credit services could be fake. Even so-called non-profit agencies could take advantage of your problem if you’re not careful with your choice.
One way to check the reputation of a agency is to see if it’s a member of the National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).
You may also check from the Better Business Bureau and from your State Attorney General’s office if there has been any cases filed against the company and how these issues were resolved.
Once you’re sure that the agency is a legitimate one, know as much as you can about the services the agency provides. Inquire about the fees that you will be required to pay, what programs are offered, and what certifications the agency have.
Remember that an agency should not ask you to submit payment unless the services have already been provided.
Judith
Does Credit Counseling Hurt My Credit Rating?
Jeremy P Stanfords asked:
Counseling Carries No Penalty
For many borrowers, credit counseling is simply a matter of getting good advice. They acquire skills they may never have learned such as how to set up a budget. Many young adults find themselves on their own with few money management skills. Our parents took care of things and we never had to balance a checkbook or calculate the cost of borrowing. A few early mistakes can lead to serious problems later in life.
These borrowers can turn their finances around on their own without negotiating with their creditors or changing their debts. In these cases, credit counseling carries no penalty. Counseling is done in confidence and lenders will never find out their customers have sought help. For this reason consumers should never be afraid to seek counseling.
Debt Changes Have Some Effect on Credit
The next step in credit counseling is negotiation. The counselor may advise the borrower how to discuss debt changes with the lender or, in most cases, will act as an intermediary to help the borrower negotiate a fair settlement. How much the affects a person’s credit depends on how severe the changes are made and how the lender reports it.
Many lenders view credit counseling as a positive step. They are willing to make small changes to a person’s debt without filing a negative report with credit agencies. New government programs exist to help borrowers without penalizing lenders and these can have little or no effect on a person’s credit rating.
Other changes may have more serious effects. Significant changes to a debt may hurt a person’s credit score and personal bankruptcy is a serious black mark on a credit history. However even these changes will have a net positive effect as the consumer gets finances under control and becomes a better borrower in the future.
The Worst Choice is Ignoring the Situation
Debt problems won’t go away. Consumers who keep letting things slide from month to month are just making things worse. Lenders will not give up. Collection agencies can garnish wages or seize personal assets if the debts become bad enough. A repossessed vehicle could prevent a person from getting to work, leading to job loss and more severe debt problems.
Credit counseling is always a positive move. Even if it leads to debt changes that have a small negative effect on a person’s credit score, these negatives are far less than the mounting problems of disregarded debt.
It may feel like you have no choice, but there are many options for struggling consumers. Talk to a credit counselor and find solutions for your debt problems.
Charlotte
Counseling Carries No Penalty
For many borrowers, credit counseling is simply a matter of getting good advice. They acquire skills they may never have learned such as how to set up a budget. Many young adults find themselves on their own with few money management skills. Our parents took care of things and we never had to balance a checkbook or calculate the cost of borrowing. A few early mistakes can lead to serious problems later in life.
These borrowers can turn their finances around on their own without negotiating with their creditors or changing their debts. In these cases, credit counseling carries no penalty. Counseling is done in confidence and lenders will never find out their customers have sought help. For this reason consumers should never be afraid to seek counseling.
Debt Changes Have Some Effect on Credit
The next step in credit counseling is negotiation. The counselor may advise the borrower how to discuss debt changes with the lender or, in most cases, will act as an intermediary to help the borrower negotiate a fair settlement. How much the affects a person’s credit depends on how severe the changes are made and how the lender reports it.
Many lenders view credit counseling as a positive step. They are willing to make small changes to a person’s debt without filing a negative report with credit agencies. New government programs exist to help borrowers without penalizing lenders and these can have little or no effect on a person’s credit rating.
Other changes may have more serious effects. Significant changes to a debt may hurt a person’s credit score and personal bankruptcy is a serious black mark on a credit history. However even these changes will have a net positive effect as the consumer gets finances under control and becomes a better borrower in the future.
The Worst Choice is Ignoring the Situation
Debt problems won’t go away. Consumers who keep letting things slide from month to month are just making things worse. Lenders will not give up. Collection agencies can garnish wages or seize personal assets if the debts become bad enough. A repossessed vehicle could prevent a person from getting to work, leading to job loss and more severe debt problems.
Credit counseling is always a positive move. Even if it leads to debt changes that have a small negative effect on a person’s credit score, these negatives are far less than the mounting problems of disregarded debt.
It may feel like you have no choice, but there are many options for struggling consumers. Talk to a credit counselor and find solutions for your debt problems.
Charlotte
Credit Repair Counseling – Why You Should Never Pay For It
Ryan J. Taylor asked:
Using a credit repair counseling service should only be considered as a last resort. There is a lot of good they can do, but there is also a lot of harm that can be imposed. If you need fast credit repair, you might be better off learning how to do it on your own.
There’s actually not much a credit repair counseling service can do that you can’t do without the help. They do know the system, and they may have a process that allows them to submit negative item claims faster. However, you can do everything they do entirely on your own – without having to pay the couple thousand dollars that many services charge.
The second reason you don’t want to use a credit repair counseling service is because you can actually be more effective. Lenders can tell right away just by looking at letterhead that you are seeking professional help. As a result, they are less likely to work in your favor and will assume that they are using questionable tactics to fix your credit. If you were to do the same process yourself, make the phone calls and write your own letters, there’s a better chance that lenders will be more willing to forgive you and help you out.
Another reason you wan to avoid using a credit repair counseling service is because if you end up settling your debts, those lenders will put a big red stamp on your file. This note will tell every lender that you used professional help to get out of paying back your debt. While this won’t have a direct impact on your credit score, it will alarm lenders and lead them to believe that you have no intention in paying them back. This could make it difficult for you to get approved for the loan you need.
You are much better off spending a little bit of time learning the secrets to credit repair and doing it yourself. This will allow you to reach your goal faster, increase your score more, and potentially save you from paying thousands of dollars in consulting fees.
Allan
Using a credit repair counseling service should only be considered as a last resort. There is a lot of good they can do, but there is also a lot of harm that can be imposed. If you need fast credit repair, you might be better off learning how to do it on your own.
There’s actually not much a credit repair counseling service can do that you can’t do without the help. They do know the system, and they may have a process that allows them to submit negative item claims faster. However, you can do everything they do entirely on your own – without having to pay the couple thousand dollars that many services charge.
The second reason you don’t want to use a credit repair counseling service is because you can actually be more effective. Lenders can tell right away just by looking at letterhead that you are seeking professional help. As a result, they are less likely to work in your favor and will assume that they are using questionable tactics to fix your credit. If you were to do the same process yourself, make the phone calls and write your own letters, there’s a better chance that lenders will be more willing to forgive you and help you out.
Another reason you wan to avoid using a credit repair counseling service is because if you end up settling your debts, those lenders will put a big red stamp on your file. This note will tell every lender that you used professional help to get out of paying back your debt. While this won’t have a direct impact on your credit score, it will alarm lenders and lead them to believe that you have no intention in paying them back. This could make it difficult for you to get approved for the loan you need.
You are much better off spending a little bit of time learning the secrets to credit repair and doing it yourself. This will allow you to reach your goal faster, increase your score more, and potentially save you from paying thousands of dollars in consulting fees.
Allan