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.
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 »
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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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.