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Credit Counseling Companies
Credit counseling companies are not always what they appear to be. While many credit counseling companies, both for profit and not for profit, are very legitimate businesses with only the consumers best interest at heart, some unscrupulous operators are giving that industry a bad name. A few issues have arisen over the last couple of years that relate to the actual status of some companies that claim to be not for profit, how money they charge consumers, and who exactly pays the costs of some of these firms. Credit counseling companies in a number of states have drawn the attention of the Federal Trade Commissions office which has so far as to shut some of these businesses down completely and others have been fined and threatened with similar action if they do not change some of their practices. These charges have shone a new spotlight on a segment of the financial services sector, which had been operating with little attention, and out of control, according to some knowledgeable observers and industry watchers.
Several credit counseling services that have been under the Federal Trade Commissions magnifying glass are the National Consumer Council which has been masquerading as a not for profit agency while simply raking in profits like they were going out of style. One of the most famous or infamous amongst this group is Ameridebt that was shut down for defrauding individual Americans who were seeking debt relief of millions of dollars in hidden fees and charges. Other for profit companies providing credit counseling have also been exposed as serving several employers as they receive funding from the credit card industry to cover all of their overhead costs. Not only is the money they receive from clients pure gravy but also a lot of observers are questioning their loyalty to the people that they are in business to serve. Several class action lawsuits are already winding their way through the court system on this apparent conflict of interest.
Another major area of contention has arisen about the validity and effectiveness of the whole credit counseling process on the credit rating of the individual who goes through this process. There are a few flaws in the current process that actually make it harder and longer to regain your credit through this process than even through bankruptcy. If the intention is to avoid bankruptcy shouldnt credit counseling ameliorate this situation rather than making it worse? There are plenty of great credit counseling firms in the marketplace. Just be sure to do your checking first because sometimes credit counseling companies are not what they appear to be.
Credit Repairing
Therefore it is imperative that you are fully aware of what is on your credit report.
Thats why every year millions of Americans go bankrupt or are forced to undergo credit counseling, debt reorganizing, or debt consolidation just to stave off that black mark on their credit ratings. All of these suggestions will be based on the individual case and the depth of the debt problems. They will not be able to completely help you unless you are completely cooperative. There are several things companies look for when going through your credit report.
Generally speaking not for profit organizations are cheaper but for profit companies tend to have more qualified staff.
Credit counseling companies in a number of states have drawn the attention of the Federal Trade Commissions office which has so far as to shut some of these businesses down completely and others have been fined and threatened with similar action if they do not change some of their practices. Who Needs Credit Counseling? We are often lured into the credit and debt trap very young through advertising, peer pressure, and the desire to be popular. There are a few flaws in the current process that actually make it harder and longer to regain your credit through this process than even through bankruptcy. Other for profit companies providing credit counseling have also been exposed as serving several employers as they receive funding from the credit card industry to cover all of their overhead costs. You should also ask them what their fees or charges might be, both upfront and as part of any on-going proceedings.
This means that there is no collateral attached to the money that is loaned and therefore the creditor may be willing to settle since they dont have any other guarantee for the lending of the money.
What student can afford to be without food and accommodation as they go through college? There are no secrets in the credit industry and if you have changed addresses or even names your credit history is likely to follow you. Moreover, new bankruptcy law in 2005 has made it mandatory to undergo credit counseling session before filing bankruptcy. |
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