Credit Repair and Counseling
Have you ever spent beyond your means? Don’t worry you are not the only one who has made this mistake because some people think that as long as their purchase is approved everything is ok. But is it? When the bills come in and you can’t pay for them, you might need credit repair and counseling.
Credit counseling can help with credit repair because they will act as your financial advisor. Most of these individuals are certified accountants and they will do the negotiation and leg work on your behalf.
Before they can talk to your bank, they will first have to review how much you owe and then come up with a plan.
This is better known as the debt management plan. Once the banks agree to it, you have to do your share by making the monthly payment and doing a few other requirements.
These include closing all unsecured credit accounts, not taking any additional unsecured credit, monitoring your credit card payments so you see that your debt is slowing being paid off.
The benefit of this arrangement is that you will be able to pay your debts at lower interest rates, reduced or waived late fees and payment terms from as short as 5 years to as long as 20 years.
What credit counselors cannot do is eliminate the stress that comes with paying bills because again, this is something you have to do on your own. They simply assisted and you have to do the rest.
The debt management plan that was drawn up will be reflected on your credit report and there is now way it can be covered up.
A credit counselor cannot help you if you have secured loans which involve collateral. This is because when you are not able to pay for it, the company which you got it from has the right to have it repossessed.
One thing you have to consider when getting help is choosing the right credit counselor properly. To do that, you have to ask questions and get feedback from previous customers.
If ever they tell you not to contact the credit bureau, do anything illegal or make false statements, walk way because this is most likely a scam. At worse, you can even go to jail if ever you decided to go along with it.
The credit counselor at this point is probably the only friend you have in the world and aside from striking a deal with your creditors, they will even teach you how to save money.
You will probably be taught how to cut down on certain expenses, how to balance your budget and if you need to sell off certain assets just to pay off some of the debt.
These changes as you know will be good for you in the long term so you just have to trust your credit counselor.
As a client, you have rights under the Credit Repair Organizations Act and the company you are looking at should make you aware of it. It is best you read and understand it before you sign any contract.
Credit repair and counseling go hand in hand especially when you don’t have the courage to face this problem on your own. There are private and non-profit organizations that are willing to help so you just have to find the right one.