Credit Counseling, Debt Management, Debt Consolidation, Credit Repair. How do they help consumers with their debt?
Credit Counseling Companies will review your credit reports and unique financial situation, as well as help you create a budget. There are many companies that will provide this basic service free or very low cost. Most also offer two basic programs.
One is a Debt Management Plan or Structured Debt Repayment Program. With this program, they will first want to see your accounts at least 180 days behind. For an initial fee, they will try to settle your accounts for less than what is owed. Then, you will make one payment to the Credit Counseling company and they will pay each of your accounts for you. Your monthly payments will also include a fee to the company for providing this service. This can help a few consumers in special situations, but for the most part, consumers need to learn how to manage their own debt or they will find themselves in the same situation again.
Another program is Debt Consolidation. With this program, instead of the company paying each of your creditors, they will consolidate all accounts into one loan. This will close out all of those individual accounts. You then make the one monthly payment for the consolidation loan. Keep in mind though, that in order to have a good credit score, you will need old accounts with good payment history. If these are closed out, they will be reporting in a negative status for the next seven years.
Credit Repair Companies have each of your accounts reporting on your credit reports validated. Statistics show that approximately 80% of reports contain errors. Credit Repair can find these and have them corrected or removed. No credit repair company can legally claim to have every negative account on your reports deleted. There are laws preventing Credit Bureaus from reporting accounts incorrectly, outdated, or unverifiable.
Your credit score can mean the difference between getting a reliable vehicle, owning your own home, renting a home, or even obtaining certain types of jobs, so it’s very important to get a good handle on your debts and learning to manage them properly.
Expert Credit Consultants is a company based in the Dallas/Fort Worth metroplex and registered in the state of Texas that can work with you on all of these tasks. www.ExpertCreditConsultants.com
