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So you already know you need to pay down debt. Don’t overlook an important tool in your debt reduction efforts: your credit report. It’s important to check your credit report to make sure debts and other financial obligations are being reported accurately. Here are some things to remember about your credit report.

1. Creditors, employers, landlords and other businesses check your credit report when you apply for credit and services, and you should, too. Having a poor credit report could spoil your chances of refinancing a home, getting a job, or qualifying for the best interest rates on private student loans. Read the rest of this entry »
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If you’re drowning in credit card debt, you know it eats away at more than your wallet. Sometimes a helping hand is all you need to gain freedom from credit card debt. Consumer credit counseling services typically provide services including debt consolidation, acting as an intermediary between you and your creditors, and negotiating affordable repayment plans that may include waived or reduced fees and interest rates. Credit counseling services typically do not negotiate reductions in the balances owed.

The Federal Trade Commission (FTC) has recently announced increased law enforcement efforts against scams targeting people facing financial hardship and or mortgage foreclosure. This emphasizes the need for carefully selecting your credit counseling service.

• Dont Accept Unsolicited Offers of Help: If you’re past due on payments or if your home is in foreclosure, you may receive phone calls, snail mail, and email offering “help”. By taking the initiative to contact consumer credit counseling agencies, you can lessen the chance of encountering scammers.
• Shop and Compare Credit Counseling Services: When contacting consumer credit counseling services, make notes about their fee structure, services provided, and professional affiliations.
• Understand the Process, and its Limits: Consumer credit counseling services review your monthly income, living expenses, debt payments, and work with your creditors for establishing an affordable repayment plan through debt consolidation; you’ll make one monthly payment to your credit counseling service, and they distribute funds to your creditors. Depending on the amount of debt you have, repayment may take a few years.
• Consumer Credit Counseling and Your Credit: Your credit counseling program cannot erase negative credit reporting that occurred before you started your credit counseling repayment plan. Creditors generally agree to report payments made on a consumer credit counseling repayment plan as “paid as agreed.” You will be asked to close your credit card accounts as part of the terms of your repayment agreement. Credit counseling agencies can help you get out of debt, but they cannot guarantee that you can qualify for new credit after completing your repayment plan. Avoid doing business with any debt help service that makes promises or guarantees about getting new credit or “fixing” your credit reports.
• Honesty is Key: Consumer credit counseling services will ask for extensive financial information. It’s in your best interest to cooperate fully and quickly with their requests. Don’t try to hide income, lie about your debt, or conceal credit cards. Your success depends on an honest and potentially longstanding relationship with your credit counseling service. Your success will only be as good as the information and cooperation you provide.

Avoid dwelling on past mistakes and misfortunes, and focus on succeeding with your repayment/debt consolidation plan. The effort you invest will be worthwhile and can help you prevent the consequences of filing bankruptcy.

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