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Who Needs Credit Counseling?
Anyone who has already missed the payment date or the consumer anticipating a possible hardship in near future can benefit from the service. It is always advised to go to a counselor before any negative item enters into credit report. So if you are still current with your accounts and afraid of falling behind, immediately see a counselor to find a suitable way out and protect your credit. Remember, once your creditor takes you to court and wins a judgment, it will be reported as a public record in your credit file and stay there for 7 to 10 years. Before the debt goes beyond your capacity and compels you file bankruptcy, go for credit counseling and stay creditworthy forever. Read the warning signs that help you decide if you need credit counseling or not.
As far as FICO Score is concerned, it does not matter if you are enrolled in credit counseling program or not. FICO scoring model does not count this data. However, your creditors are likely to report your account as under credit counseling or debt consolidation program. There are few lenders that do not prefer credit counseling items on your report. But Debt Consolidation Care Community says that the status definitely shows your interest to pay your bills. So you are going to get privilege in future. Moreover, new bankruptcy law in 2005 has made it mandatory to undergo credit counseling session before filing bankruptcy.
Two types of agencies are there in the market - non-profit and those who work against a nominal fee. Community members frequently ask the question why an agency would work without a fee. The answer is simple: the counseling agencies usually receive a particular portion of the fund paid to the creditor, known as Fair Share.
However, there are few agencies that pretend to be non-profit, but keep a part of consumers' money with them. Beware of such companies. Ask these questions to your counselor:
Is there any monthly charge, set up charge or penalty for leaving the program?
Are these compulsory? A true non-profit firm should not incorporate any mandatory fees.
Work with a reliable agency so that you can get the most out of the service.
It is pretty difficult to anticipate how long it will take to get you out of debt. Several factors work behind it. Let's look at an example: if you pay 0 per month it will take 10 months to repay a 00 loan in full. But, if you decide to pay 0 per month, the repayment period is likely to be doubled. Usually counselors design the program in such a way that you can become debt free within 2 to 4 years.
Free Credit Repair Services
Most of us end up with unmanageable debt or serious credit problems through a series of bad decisions, bad luck, and poor knowledge of how the system works.
Stop using the credit card immediately so that you are not incurring any more debt on the card. In the event that you are denied credit, the creditor must provide you with a written statement that includes the reason your credit application was denied. The more you know about your finances the better off youll be.
When you finally have all your debt paid off you should think about using the money that you have used in the past to make bill payments and start putting it into savings of some kind, such as a mutual fund.
It is always advised to go to a counselor before any negative item enters into credit report. The one thing that youll want to be certain of is that the debt settlement service is licensed and experienced. If you have absolutely no ability to repay the monies owed in either the short term or over a long period of time then personal bankruptcy may be your only option.
Community members frequently ask the question why an agency would work without a fee.
Remember, once your creditor takes you to court and wins a judgment, it will be reported as a public record in your credit file and stay there for 7 to 10 years. If any credit counseling service cannot provide that information readily or without any confusion you might wish to move to the next prospective agency on your list. Proper Debt Management To Avoid Credit Counseling Credit counseling is a place of last resort for consumers who have never learned the basics of credit and debt management. Once they have determined the extent of your debt problems and calculated your ability to repay then the credit counseling agency will help you develop a debt consolidation plan. When you already have a high debt ratio you may find that you dont qualify for any type of new financing, including a bad credit loan. |
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