Choosing a Credit Counseling Service
What is Credit Counseling?
When your debt is too high to manage and you are unable to make payments on your bills, Credit Counseling may be your answer. Credit Counseling Agencies set up a debt repayment plan, which helps you repay your unsecured loan at a lower interest rate. With this plan, money is deposited every month. Those deposits are used by the credit counselor to make payments for you with the payment schedule you develop together. There are some Credit Counseling Agencies that charge you little to no charge for your plan, and some over time will charge a larger fee. Each agency is different, so ask ahead of time what their fees are.
The Repayment Plan
The repayment plan set up with your credit counselor may have you agree not to use other credit while in the program. The plan also needs you to pay each month regularly and on time. Some plans can take up to 4 years or more to pay in full.
Credit History
By choosing a debt repayment plan, it will not wipe away your credit history. Information can stay on your report for up to 7 years, according to the Fair Credit Reporting Act: http://www.ftc.gov/os/statutes/fcra.htm Even though creditors can report your payments as late or missed, a pattern of on-time payments can help your credit for the future.
Get the Right Information
Make sure that you research which Credit Counseling Agency is best for you. You can get information from your local Better Business Bureau, local consumer protection agency, or your state Attorney General. Most agencies will send your information about them and the services they provide free of charge. You do not need to tell them your situation in order to just receive information about their services. Here are some good questions to ask before you select an Credit Counseling Agency.
- Are you an accredited agency?
- Do your have confidential services?
- Do you have certified counselors?
- Can you find a plan that fits my needs?
- Are my funds going to be protected? How?
- Do you offer budget and credit education?
Here are some of the Credit Counseling Agencies that can assist your needs:
www.consumercredit.com
www.cs-america.com
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