Credit counseling services can be used to help get budgeting assistance and get financial affairs in order. However, some credit counseling agencies are scams and you could end up in worse shape. Check out the National Foundation for Consumer Credit or the Consumer Credit Counseling Service. Look at our articles, blog posts and videos for more information about what a credit counsling service can do for you.
If you are considering bankruptcy, before you file you should talk to the credit card company to see if they are willing to settle your debt for some amount that is less than you owe. If they know your only other option is to file for bankruptcy, they may be more willing to settle the debt. After you've sat down with a credit counseling service, you may have a better idea of what your options are and how you need to proceed.
Consumer credit counseling services and debt management programs can affect a person's credit rating. Entering a debt management program is a much better move than filing for bankruptcy protection. While some lenders may view it negatively, those that work with debt management companies and the participants in their program will view it more positively.
There is a lot of confusion in the world of credit counseling, which is why so many consumers have unpleasant experiences. The issue is less whether you are enrolled in the debt management program, but more whether you pay off all of your debts in full. If you negotiate a partial payment with all of your creditors, your credit score may take a hit.
All credit counseling agencies are not looking out for you - even the ones that claim to be non-profit. Many consumers are surprised to learn that there are good credit counseling companies and bad ones. Just because the one you're using carries the "non-profit" label doesn't mean it isn't making money for its owners. "Non-profit" also doesn't mean the counselors are really working on your behalf. Once you find a good credit counseling agency, there are different ways it can help, some of which will affect your credit history.
Reading your credit report can be confusing. Ilyce suggests a good place to find a reputable non-profit credit counseling service and decipher their credit report is through the National Foundation for Credit Counseling (NFCC.org) or through Consumer Credit Counseling Service (CCCS.org). They provide budget counseling that should be free, or very nearly free to help you understand your credit report.
The average American family has as much as $8,800 in credit card debt and as many as 20 different lines of credit open. Reaching out to a credit counseling service can be intimidating if you don't know what to look for. If you have debts and want to pay them off, you should choose your credit counseling agency carefully.
Do you feel like your debt is overwhelming or out of control? It may be worthwhile to enroll in a debt management program rather than filing for bankruptcy. While both a debt management program and bankruptcy look bad on your credit report, a bankruptcy makes for worse credit. Learn what to look for when choosing a debt management program.
Non-profit credit repair or budgeting services should only be used if you are on the verge on bankruptcy. Using a credit repair service when you aren't on the verge of bankruptcy can sometimes cause damage to your credit. Having debt reported as "closed by credit grantor" can be a black mark on your credit report. Finish the pay-back program, and then you can start to recover your credit.
A person used a non-profit credit repair service and now can not qualify for a car loan. Ilyce explains to use these services only if you are on the verge of bankruptcy.
If you've got bad credit or are struggling to pay your bills, get credit counseling, get help paying off your debt to improve your credit score. Your credit score is your key to qualifying to buy a home, so you have to get rid of bad credit by paying off your debt to improve your credit score. If you can't seem to get a handle on your bills, working with a credit counselor can help you pay off your debt, improve your credit score and turn your bad credit into good.