Living with bad credit is tough. If you hope to get a car loan or to purchase a home, it is nearly impossible with bad credit. Or, if you do manage to get approved for the loan, the cost of the interest is so high that it hardly seems worth it anymore. Similarly, having bad credit can make it impossible to get a credit card, which almost seems like a necessity in today’s day and age. With the need for good credit, it is little wonder there are increasing numbers of so-called credit “doctors” popping up everywhere that are all willing to take away all of your credit woes.
With the average American family carrying around seven credit cards and drowning in thousands of dollars of debt, it is easy to see why more and more of these ads are showing up on the radio, television, and newspaper ads. In the past 20 years, American consumer debt has increased by nearly four times of what it used to be – making debt counseling and credit assistance a field with an ever-increasing number of potential customers. But, are these companies really helping you like they say they are?
According to Dave Ramsey, who is the author of “The Total Money Makeover,” the majority of these companies don’t actually consolidate debts. Rather, they simply pay the bills for consumers and, in 88% of the cases, the consumer actually falls back into debt afterward.
Those companies that claim to be able to help improve your credit score are also just taking your money without providing a real service. The only way to increase your credit score is to start improving your financial habits and to petition the credit score agencies to remove information that is incorrect from your credit report – something you can do yourself without the help of a so-called expert.
When looking for a reputable company to help you out with your debt, the Federal Trade Commission recommends looking for a number of factors. First, stay away from any company that asks you to pay for its services before it actually provides any. Second, don’t do a business with a company that won’t tell you about the things you can do for free on your own. Finally, avoid those companies that insist that you no longer work directly with the credit-reporting bureau yourself.
Choosing a company that simply claims to be nonprofit is not a guarantee of their validity. Many of these supposed nonprofit organizations will find away to incorporate fees or will put pressure on you to make “voluntary contributions.” To know for sure you are working with a legitimate credit assistance program, work with one that belongs to the National Foundation for Credit Counseing. You can find one near you by calling 800-388-2277 or by visiting www.nfcc.org.
Related Posts:
- Beware of IRS Phishing Scams - If you’re one of the millions of people who qualified for tax rebates as a part of the government’s economic stimulus package, you need to...
- Credit Counseling Tricks and Traps - If you are dealing with high credit card balances that you can not afford to pay off or even pay down, it’s...
- Beware of Minimum Payments - Americans are slowly falling further and further into debt. Much of this is due to the instant gratification mentality so rampant in...
- Things You Must Know About Credit Counseling Agencies - A credit counselor might be a good idea to contact if: You have multiple forms of debt such as credit cards, mortgages,...