Credit Card Counseling Vs. Self-Help Strategies for Debt Relief
Should you make use of a credit card counseling service to help you manage your debt? A credit counseling service can help you to work out a budget based on what you can afford and will negotiate with your creditors on your behalf. Each month you will write out a single check to the agency.
This is fine as far as it goes. There are many reputable non-profit credit card counseling
agencies but what about so-called 'credit repair' agencies. You've probably seen the advertisements that promise you complete debt relief, a credit score clean-up or even a job! Stay away from these scams. The fees you charge may amount to thousands of dollars and they don't deliver on any of their promises.
These are not true credit card counseling
companies and may charge you a fee for credit repair before they deliver and results at all, charge you for what you can do for free yourself and don't inform you of your legal rights. They may also advise you not to contact a credit reporting company direct or suggest that you take on a new credit identity.
If you need help with your credit card debt
you don't need to despair. You can manage your debts yourself with a little foresight and discipline. Try working out a repayment plan with your creditors and learn how to budget accurately.
You should also consider a 'Do-It-Yourself Check-Up on your credit report. This is where you can find out how you shape up financially and is a good indication of where you are headed in the future. If you realize you need professional help it may be a good idea to contact a credit card counseling agency.
Your credit report is important as it determines whether you will be able to get a loan or insurance and what it is going to cost you! Making sure that your credit score is accurate is critical. If the information on your report is poor do not fall into the trap of thinking that it can be removed by a 'credit repair' agency. Contact a credit card counseling agency for more advice and information.
It isn't possible to legally remove accurate information from your credit score. However over time and with an adjustment of you financial habits you can improve your score. A reputable credit card counseling agency can advise you on how to do this.
So making use of a credit card counseling service can be helpful but you can also learn to manage your money yourself by being disciplined and responsible. The things to avoid are giving your money to companies of ill-repute and avoiding dealing with your debt problems. These two strategies will see you drowning in more debt that may cripple you financially.
To report any unscrupulous credit card counseling agencies contact your local consumer affairs office or your state Attorney General (AGs). Many AGs have toll-free consumer hotlines. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.
