The first thing you want to
understand is these companies are ALL
more interested in making money off you
than they are in preserving your credit
rating. The bottom line with either
credit counseling or debt consolidation
is that it absolutely ruins your
credit. I can just hear the companies
arguing this with a consumer right now,
telling them nonsense like "It helps
your credit since it tells creditors
that you're working on your situation
and not just running away from it."
Listen... if one these places tells you
that than watch out. Why? Because
they will lie to you about other things
as well!

One of the first actions these
programs usually requires you to do is
for you to CLOSE all your revolving
credit accounts. You then make
payments to the organization and they
take care of everything for you. What
this says to all your creditors (as
well as anyone considering giving you
credit) is that you are so out of
control with your finances that you
can't even manage paying everyone back
on your own. Therefore, you're hiring
someone else to do it for you!

99% of the time these companies
will claim they can negotiate with your
creditors and get interest rates
reduced thereby saving you money.
While this is true, what's also true is
you can easily negotiate these same
rates as well as they can by just
calling your creditors yourself. You'd
be amazed at how many of your creditors
would love to hear from you (especially
when the chips are down!). Not too
mention, any money the counseling
company was to save you would more than
likely be sucked back up by their
monthly fees (usually around $500 to
$1,000 per year).

This brings us into a whole other
dynamic of their business model.
Because these companies always make
their money off of monthly fees paid by
the consumer, the longer they can keep
those monthly fees coming in the more
profitable their business will be.
It's for this reason that most
consumers who sign up with these
companies usually find themselves on
payment plans with the lowest monthly
payment possible (which turns out to
also be the LONGEST payment plan as
well). Not surprising is it?

Raise Credit Score

Am I against Credit Counseling and
Debt Consolidation companies?
Absolutely not. After all, there are
millions of people in America who will
never be able to manage their finances.

It keeps them out of future
financial trouble by forcing them to
live their lives on a "cash and carry"
basis; which is ultimately conducive to
a better standard of living down the
road.

On the other hand. If you're good
with your finances and have control
with credit but went through some type
of hardship beyond your control in the
past (i.e. divorce, job loss etc); then
the services of these companies will
never be for you. You will do far
better and preserve your credit rating
by taking matters into your own hands.
Reason being is that you understand
your credit rating is a powerful tool
that can help you move ahead faster,
help others and help yourself as well
as create the life you want. It all
comes down to self management. We all
know that those who cannot manage
themselves will ultimately be managed
by others. Credit is no different.
When you learn to manage it well, you
are the master and it is the servant.

If you care about your credit and
want to benefit from it in the future,
you'll look inward and
get yourself out while preserving your
credit rating the best you can. Credit
and debt counseling is for people who
are "ok" with throwing their credit
rating in the trash so they can have
"someone else" manage their payments
for them (since they are unable to
manage them themselves). And again, as
far as negotiating interest rates, you
can do just as good as them or better.
If you don't believe me just call any
of your creditors and straight out tell
them your situation. You will quickly
find you don't need to be afraid of
them. They just want to get paid like
the rest of us.

Raise Credit Score

You often get to hear about people with financial problems resorting to credit counselling services. However, people tend to confuse that these services help you in negotiating your debts or reach a settlement. In reality, credit counselling helps you gradually reduce your monthly payments in such a way that you are able to balance you debt to a value that is easily affordable. This article helps you in understanding the process to work with credit counselling. The best time to look for the help of a credit counsellor is when your account is handed over to collection agencies and the bill collector's start haunting you day and night. You must be very careful when deciding which credit counselling service to opt for. You must know that many of these services are set up just to make benefits and they cannot actually help you staying within the legal boundaries.

For example, you must avoid credit counselling services that claim that they can fix your credit report in no time because this just not possible legally. You must try to choose credit-counselling services of agencies that are accredited by Consumer Credit Counselling Services. Credit counselling process: After you have selected a genuine credit counselling service to resort to, you must ensure that you provide them all necessary detail and information. Remember any information that you avoid telling them prevents them from properly handling your situation and can lead you to quite unpleasant surprises in future. After obtaining all the necessary information on your case, the counsellor will start working towards solving your problem. The counsellor will try to negotiate with your creditor to reschedule your payments in such a way that you are more comfortable in paying them.

The counsellor may also try to get the minimum sum required for your monthly payments lowered. Many agencies also provide debt management systems to help you manage your credits. While working with these systems, you deposit a lump sum amount to your credit-counselling agency and allow them to handle your monthly payments. Such a system might take some burden off you and might promise you some peace of mind but is not fool proof. Even your credit-counselling agency can miss a payment that will badly reflect on your credit report. Therefore, it is always better that you manage your payments yourself. However, if you really want to opt for debt management system then check in to the history of the credit-counselling agency before making them in charge of handling your payments. Most of the serious and genuine credit-counselling agencies are free of cost.

Therefore, to avoid yourself from getting in a fraud, you must avoid agencies that require you to make a large upfront payment. You must always opt for lower-risk and lower-cost services. Your opting for a credit-counselling agency might leave a bad mark on your credit report because it indicates that you are facing financial problems. However, while trying to recover from your mistakes on your own might lead you to more problems even bankruptcy. Therefore, if you have a problem with your credit card payments that you are not able to handle then in might be best if you allow a professional to help you.

Being really passionate about consumer counceling, Peter Mason has been editing a large number of summaries on this specific subject. His abstracts on settle debt and credit card debt settlement are published on http://www.creditenio.com/ccsettlement.html

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