The Deal On Credit Counseling, Repair and Debt Consolidation

Credit Counseling, Repair and Debt Consolidation

Most of us have heard of credit counseling, debt consolidation and credit repair companies and many of us have sought or considered seeking their services. The whole business of fixing and helping people with their credit problems is a highly profitable industry, generating billions of dollars a year.

All credit counseling services and debt consolidation services do is negotiate payment arrangements with your creditors to lower rates and sometime waive fees, all of this at a cost to you somewhere upwards of $25 a month, that goes straight into the counseling service’s pocket. I suggest calling your creditors and trying to strike your own deals before turning to these companies. If you want to do an extensive credit repair on your own, invest in one of the many books on Credit Repair that can help you which will run you less than a month's fees to one of these companies for the same results. If you really feel like you can’t get anywhere with creditors and need to use a credit counseling service or a debt consolidation company, do your homework. Research different companies, don't just go with the first one you see because it sounds good. Take some time to review each company and their fees and terms and pick the best one with the best terms and fees. A small difference of as little as $5 in fees adds up quickly and can spell big bucks over the life of the arrangement. Many debt consolidation services are actually loans, they pay off your creditors on your behalf and then you pay them back at a rate lower than your original debts.

While Credit counseling and debt consolidation are legitimate businesses, be wary of most companies that claim to do credit repair. We’ve all heard the saying, “if it sounds too good to be true it probably is”, well what sounds better than having hundreds of points added to you fico score or going from bad credit to good credit in 30 days? Get real! Most of the time when you see these things, it’s a scam, they will take your money and you will never hear from them again, but why take my word about it when you can read about it for yourself. Follow the link to the Federal Trade Commission’s warning about these companies. http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm . Don’t be a victim or find out the hard way.