Owing someone else money is never a very good feeling, especially when that someone is a credit card company or mortgage company. Debt can be overwhelming and exhausting both financially and emotionally. Excessive debt can be crippling. Most people usually incur debt out of necessity by borrowing money for something essential, like a bill payment, emergency repair, or medical expense. Once the cycle has begun, it can often spiral out of control.
For people in dire situations like this, a service has been created called credit counseling. Credit counseling is an education offered by financial specialists for consumers that have incurred debts that cannot be repaid. Companies that provide these types of services may even negotiate with a debtor's creditor in order to create a debt management plan. This type of plan is usually a plan for repayment by the debtor. It will negotiate for reduced fees and interest rates.
One benefit of a debt management plan is that the company will work with all creditors in order to consolidate several debts to different creditors into one monthly payment. The one monthly payment is usually lower than sum of the multiple payments. Credit management agencies will also negotiate with the creditors for lower interest rates. Often defaulted credit cards can have interest rates up to 30%, which would take several years to pay off. The goal of credit management is to reduce those rates so that the debt can be paid off more quickly.
For people who have been crippled by excessive debt, consulting with a credit management agency may be the best solution to returning to a normal life.
DebtGuru (http://www.debtguru.com/) is the Internet domain for American Credit Foundation, an IRS 501 non-profit consumer credit counseling organization and offers debt consolidation help.
Author : Billings Farnsworth is a freelance writer.
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8/11/09
Choosing a Credit Counselor
Not All Credit Counseling Companies Are Created Equal
There should be many criteria that a credit counseling agency must meet before you hand over your private credit information to them and write them a check for a big fee. The FTC and IRS have issued consumer alerts in the past cautioning the gullible public to be highly cautious when choosing a credit counseling agency. Unfortunately there have been dishonest practices inside the credit counseling industry that have led to several regulations and even some criminal prosecutions.
Of course even though there are many reputable organizations that provide worthy guidance and education, consumers should remain very wary of credit counseling services that pledge quick repairs with a situation where the process is slow, more like a marathon race rather than a fast sprint. Consumers can help protect themselves against misleading practices by understanding the proper criteria that should be used to pick a legitimate counselor.
A certified counselor can many times help an individual build a financial plan, calculate the entire amount of debt outstanding and arrive at a total monthly payment which will fit within the bounds of that carefully laid out and considered financial plan. The biggest difference between attempting to do this yourself and doing it with a credit counselor is that many of these credit counseling agencies are actually debt management companies that want to collect money from you every month and disburse these funds to your creditors. These creditors may possibly have agreed to take a lesser interest rate and smaller payment. For this kind of debt management service clients should not pay more than $50 per month.
Doing Your Research Is Key
Before making a final decision on a credit counseling firm check with organizations in your area whom you trust to give you straight information such as local universities, credit unions you belong to, government agencies or a military base who can offer debt analysis free of charge or at low cost. If you can get a job with a big firm they may have an employee assistance program that offers this type of assistance. These organizations probably will not offer a debt management program to you however they may be able to provide a broad range of additional services than just financial planning.
Getting Advice from Someone You Know With Experience
Problems related to consumer debt and bad credit terms due to low credit scores are prevalent problems so don't believe that you can't find someone that has already used a credit counseling agency with whom are acquainted. Even though just about everybody is hesitant to talk about financial problems they have had or are having a reference from someone you trust that has been through the process will provide you more peace of mind than going it alone.
Nonprofit Companies and Membership in Industry Associations
In your search for a credit counseling agency consider nonprofit companies with a track record of having been in business for many years. Hiring a nonprofit company can help to decrease the costs of credit counseling however it will not guarantee the legitimacy of the company or, for that matter, even the fairness of their fees. In the U.S. the firm you are considering needs to be a current member of two large industry trade associations; The National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. Both of these industry trade associations require third-party accreditation of their members. Be aware however that accreditation is a helpful indication of integrity but it is in no way a warranty of quality.
Are Credit Counseling Firms Required To Have A License?
Always check with your state attorney general's office about licensing requirements for credit counseling firms doing business in your area. If your state or local jurisdiction requires a license be certain the company you are considering contracting with has a valid and currently issued license. Once you've compiled a list of the possible firms you are going to consider look for complaints filed with the Better Business Bureau, your state attorney general's office and other related regulatory authorities in your state. Doing your research upfront well before you decide to sign a contract can help protect you and your pocket book in the long run.
Before Signing A Contract
In advance of making the final decision make sure to get legitimate references from the counseling agency you have chosen. Also, genuine credit counseling services should supply free of charge detailed information regarding the services they are going to provide to you taking into consideration your specific financial circumstance without requiring fees paid upfront or asking for your private financial and identity data. If the firm demands an up-front fee and refuses to have a casual discussion with you regarding the services they can provide then don't trouble with them. Look for a company that offers an extensive range of services and that has well qualified, experienced and certified counselors. Also extremely important is to ask about the security of the private financial and identity information you provide to them.
Hiring the Wrong Credit Counselor
Working with a reputable credit counseling company to help handle your debt problems, pay off your credit cards and boost your credit score is a good option if you are having difficulties with debt and having trouble making monthly payments. However, if the job is botched hiring the wrong credit counselor can do significantly more harm than good. A nightmare example is using a dishonest credit counseling company to manage your debt then discovering they are stealing your money and ruining your credit even further.
Do yourself a favor and methodically complete your research. Investigate the service that you intend to work with and be certain that you have confidence in the professionals with whom you are going to trust your financial future to.
Author : Wayne Jennings
About the Author :
For additional information about choosing a credit counselor go to http://www.debthelptools.com and choose from the several useful debt management articles and tools. Also, discover many helpful resources and handy tools to assist you with troubling debt problems.
Read more!
There should be many criteria that a credit counseling agency must meet before you hand over your private credit information to them and write them a check for a big fee. The FTC and IRS have issued consumer alerts in the past cautioning the gullible public to be highly cautious when choosing a credit counseling agency. Unfortunately there have been dishonest practices inside the credit counseling industry that have led to several regulations and even some criminal prosecutions.
Of course even though there are many reputable organizations that provide worthy guidance and education, consumers should remain very wary of credit counseling services that pledge quick repairs with a situation where the process is slow, more like a marathon race rather than a fast sprint. Consumers can help protect themselves against misleading practices by understanding the proper criteria that should be used to pick a legitimate counselor.
A certified counselor can many times help an individual build a financial plan, calculate the entire amount of debt outstanding and arrive at a total monthly payment which will fit within the bounds of that carefully laid out and considered financial plan. The biggest difference between attempting to do this yourself and doing it with a credit counselor is that many of these credit counseling agencies are actually debt management companies that want to collect money from you every month and disburse these funds to your creditors. These creditors may possibly have agreed to take a lesser interest rate and smaller payment. For this kind of debt management service clients should not pay more than $50 per month.
Doing Your Research Is Key
Before making a final decision on a credit counseling firm check with organizations in your area whom you trust to give you straight information such as local universities, credit unions you belong to, government agencies or a military base who can offer debt analysis free of charge or at low cost. If you can get a job with a big firm they may have an employee assistance program that offers this type of assistance. These organizations probably will not offer a debt management program to you however they may be able to provide a broad range of additional services than just financial planning.
Getting Advice from Someone You Know With Experience
Problems related to consumer debt and bad credit terms due to low credit scores are prevalent problems so don't believe that you can't find someone that has already used a credit counseling agency with whom are acquainted. Even though just about everybody is hesitant to talk about financial problems they have had or are having a reference from someone you trust that has been through the process will provide you more peace of mind than going it alone.
Nonprofit Companies and Membership in Industry Associations
In your search for a credit counseling agency consider nonprofit companies with a track record of having been in business for many years. Hiring a nonprofit company can help to decrease the costs of credit counseling however it will not guarantee the legitimacy of the company or, for that matter, even the fairness of their fees. In the U.S. the firm you are considering needs to be a current member of two large industry trade associations; The National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. Both of these industry trade associations require third-party accreditation of their members. Be aware however that accreditation is a helpful indication of integrity but it is in no way a warranty of quality.
Are Credit Counseling Firms Required To Have A License?
Always check with your state attorney general's office about licensing requirements for credit counseling firms doing business in your area. If your state or local jurisdiction requires a license be certain the company you are considering contracting with has a valid and currently issued license. Once you've compiled a list of the possible firms you are going to consider look for complaints filed with the Better Business Bureau, your state attorney general's office and other related regulatory authorities in your state. Doing your research upfront well before you decide to sign a contract can help protect you and your pocket book in the long run.
Before Signing A Contract
In advance of making the final decision make sure to get legitimate references from the counseling agency you have chosen. Also, genuine credit counseling services should supply free of charge detailed information regarding the services they are going to provide to you taking into consideration your specific financial circumstance without requiring fees paid upfront or asking for your private financial and identity data. If the firm demands an up-front fee and refuses to have a casual discussion with you regarding the services they can provide then don't trouble with them. Look for a company that offers an extensive range of services and that has well qualified, experienced and certified counselors. Also extremely important is to ask about the security of the private financial and identity information you provide to them.
Hiring the Wrong Credit Counselor
Working with a reputable credit counseling company to help handle your debt problems, pay off your credit cards and boost your credit score is a good option if you are having difficulties with debt and having trouble making monthly payments. However, if the job is botched hiring the wrong credit counselor can do significantly more harm than good. A nightmare example is using a dishonest credit counseling company to manage your debt then discovering they are stealing your money and ruining your credit even further.
Do yourself a favor and methodically complete your research. Investigate the service that you intend to work with and be certain that you have confidence in the professionals with whom you are going to trust your financial future to.
Author : Wayne Jennings
About the Author :
For additional information about choosing a credit counselor go to http://www.debthelptools.com and choose from the several useful debt management articles and tools. Also, discover many helpful resources and handy tools to assist you with troubling debt problems.
Read more!
Credit Repair - How to Fix Any Bad Credit Score
Having bad credit is an epidemic financial nightmare that many people are experiencing on the next financial basis the last few years. With the advent of the recession, the collapse of the real estate market, and with unemployment going through the proverbial roof, it is no wonder that these scores are at some of the all time lows that have ever been seen. There is a way to begin to fix your credit score by yourself or with the help of professionals. Here are few tips on how you can repair your credit starting today.
One of the first things that creates difficulty in a person's financial score is having the inability to pay their bills. Over time, if your mortgage payments, credit card payments, and any other bills that you may have become delinquent, collection agencies will be called and your creditors will file papers that will damage your credit due to her inability to pay.
In order to get a better handle on your situation, it is a good idea to get a copy of your credit report to see where you stand. There are many methods that can be used to help improve the scores. One of them is writing letters to each of the creditors explaining your situation and trying to get on a payment program that is affordable for you and agreeable with them.
If this is not a possibility, or you perceive that it is too time consuming or confusing, there are professionals that can do the job for you. Negotiators can often lower the amount of principal owed and at the same time lower the percentage rate that you are being charged and the monthly payment that you must pay in order to reestablish yourself in the financial world.
Having bad credit is one of the most detrimental financial occurrences a person can experience. It can affect everything from your ability to purchase a home all the way down to getting a cell phone. If your score is very low, you will not be able to acquire the simple things in life that alone a mortgage for a home that your family should be living in.
The easiest way to fix bad credit is to hire a professional. This is what they do on a daily basis and for a nominal fee you can be on your way toward a better credit score that can allow you to reenter a level of good standing with all of your creditors and in turn, through making consistent payments, establish yourself once again.
Author : Tommy Hilligan
About the Author :
If you would like to learn how to fix your credit, please visit this website: http://www.free-credit-repair-directory.com.
Read more!
One of the first things that creates difficulty in a person's financial score is having the inability to pay their bills. Over time, if your mortgage payments, credit card payments, and any other bills that you may have become delinquent, collection agencies will be called and your creditors will file papers that will damage your credit due to her inability to pay.
In order to get a better handle on your situation, it is a good idea to get a copy of your credit report to see where you stand. There are many methods that can be used to help improve the scores. One of them is writing letters to each of the creditors explaining your situation and trying to get on a payment program that is affordable for you and agreeable with them.
If this is not a possibility, or you perceive that it is too time consuming or confusing, there are professionals that can do the job for you. Negotiators can often lower the amount of principal owed and at the same time lower the percentage rate that you are being charged and the monthly payment that you must pay in order to reestablish yourself in the financial world.
Having bad credit is one of the most detrimental financial occurrences a person can experience. It can affect everything from your ability to purchase a home all the way down to getting a cell phone. If your score is very low, you will not be able to acquire the simple things in life that alone a mortgage for a home that your family should be living in.
The easiest way to fix bad credit is to hire a professional. This is what they do on a daily basis and for a nominal fee you can be on your way toward a better credit score that can allow you to reenter a level of good standing with all of your creditors and in turn, through making consistent payments, establish yourself once again.
Author : Tommy Hilligan
About the Author :
If you would like to learn how to fix your credit, please visit this website: http://www.free-credit-repair-directory.com.
Read more!
Credit Counseling - An Answer to Credit Card Debt
Credit card debt is a big problem for some people, especially with the economy in its current condition. Many individuals have had to use their consumer accounts for necessities due to constraints on their income. If you are in a financially strained situation, you do have options for paying off your accounts.
If you are seeking outside help, credit counseling is your best debt relief option. Now you must know that there is still a minimum payment requirement. It is usually 2% of the total amount owed on your account. It should be close to what you are already paying.
Most debt counseling companies are nonprofit and they are more likely to keep your best interests in mind than a company that is in the debt relief business to make money. Many of these organizations also have a referral service for reliable debt settlement companies or bankruptcy attorneys, if that is what is needed in your case.
The benefits of credit counseling are one monthly payment, reduced and possibly eliminated interest rates, no fees, no collection calls. Many of these debt management services also offer budgeting help and some even offer financial planning once your debts are paid.
This option is credit friendly. As long as you make your payments on time, your credit score should not suffer in the long run. It may go down at first, but once you show a record of on-time payments and your outstanding balances decrease, you will see your credit score increase again.
Debt relief is not a one-size-fits-all solution. There are many factors that come into pay when you are selecting a debt management service. A nonprofit debt elimination organization can give you help that you need to get out of debt and live debt free.
Author : Arlene Schneider
About the Author :
Debt can be very scary and sometimes it just takes a simple guide to point you in the right direction. Debt management help can get you on your way to debt freedom. Find out how you can get debt management help.
Read more!
If you are seeking outside help, credit counseling is your best debt relief option. Now you must know that there is still a minimum payment requirement. It is usually 2% of the total amount owed on your account. It should be close to what you are already paying.
Most debt counseling companies are nonprofit and they are more likely to keep your best interests in mind than a company that is in the debt relief business to make money. Many of these organizations also have a referral service for reliable debt settlement companies or bankruptcy attorneys, if that is what is needed in your case.
The benefits of credit counseling are one monthly payment, reduced and possibly eliminated interest rates, no fees, no collection calls. Many of these debt management services also offer budgeting help and some even offer financial planning once your debts are paid.
This option is credit friendly. As long as you make your payments on time, your credit score should not suffer in the long run. It may go down at first, but once you show a record of on-time payments and your outstanding balances decrease, you will see your credit score increase again.
Debt relief is not a one-size-fits-all solution. There are many factors that come into pay when you are selecting a debt management service. A nonprofit debt elimination organization can give you help that you need to get out of debt and live debt free.
Author : Arlene Schneider
About the Author :
Debt can be very scary and sometimes it just takes a simple guide to point you in the right direction. Debt management help can get you on your way to debt freedom. Find out how you can get debt management help.
Read more!
