Improving credit with help of credit counseling services

Improving credit with the help of credit counseling services

The credit counseling services can help you in improving your credit. However, it will depend on, with whom you are going to enroll in order to better your credit. If you would really like to improve your credit, it is important for you to get help from an authentic company. The credit counseling companies are those which not only help you with credit and debt management but may also help you in paying off debts.

Improving credit with counseling agencies

The main thing that you are required to do in order to improve your credit is recognize the debts that you have and then paying those off. Now, sometimes it can become difficult for you to do this and in such a situation the credit counseling companies can help you in managing the whole messed up situation.

If you go to a credit counseling agency, they can help you in recognizing the debts that you have, the credit rating you have and your credit score, they will analyze your whole situation and then will help you in budgeting. This will initiate in you that urge to start saving and paying off debts. Now, you will be able to maintain good credit only if you have low debt and if you make constant monthly payments within the stipulated time.

In addition to this, there can be various kinds of wrong listings on your credit reports. The counseling agencies may file the disputes with the credit bureaus on your behalf in order to remove the wrong listings. This will help in improving your credit. In addition to this, you may also have negative listings on your credit report. What the credit counseling agencies are going to do is they may negotiate with the creditors in order to delete the negatives with the "Pay for Delete" or the PFD option. That is, the negatives like defaults and missed payments are removed in lieu of the payment in case of the unsecured debts. So, this again can help you in both paying off the debts and removing the negatives; thereby helping you in improving your credit report.

The main thing is that, as the counselors are professionals, they have much more experience in dealing with the creditors and collection agencies they know more about the nuances of paying off debts. Thus, they are always better negotiators than us and so they can help you in paying off debts more easily and improving your credit.

CREDIT REPAIR COMPANIES, CAN THEY OR CAN THEY NOT REPAIR YOUR BAD CREDIT?

As of late I have seen an abundance of advertising for companies claiming to be able to repair bad credit.  I know this is not something new, but a "service" that has been around for many years.  With the uncontrollable amount of bad credit resulting from the economic turn of events that this nation has been suffering for the past 4 plus years, these companies have surfaced like an invasion and of course are very popular especially with families that have been suffering because of bad credit due to foreclosures, short sales, bankruptcies, etc. Our whole financial system is based on CREDIT.

No credit and worse bad credit makes it extremely difficult to purchase on credit and to even rent an apartment.

Now there are companies out there offering many "fixes"

that are not possible. 

For example have you heard?

"Give us 90 days and we will repair your credit" 

"We can remove liens, judgements, bankrupcy, negative credit from

your credit report"

"100% satisfaction.  We will clean up your credit"

Like these 3 advertising gimmicks, there are hundreds more

that are in essence misleading the consumer.

The most vulnerable to this misleading information are consumers

who have had a bankruptcy and are trying to start over again, and consumers who have had bad credit and are trying to rebuild better credit and better credit scores.  Keep in mind that generally bad credit is reported to the 3 active credit bureaus.  Equifax, Experian and TransUnion.  The bad credit has to come off all 3 bureaus. 

There are companies out there that may claim to be able to clean your credit, but you may become a victim of theirs instead of a client.  There have been documented cases where the so called "company" takes the clients hard earned money and runs.  Does absolutely nothing except leaving the client deeper in debt and feeling violated, robbed, lied to, well you get the idea.

Now with this knowledge in hand what can be done?

From my research and from my experience, I would interview several

credit counseling agencies.  They should all give you the same advise and not guarantee you a thing.  Credit repair is very difficult.

Credit reporting agencies do many errors and refuse to backtrack on those errors unless you have documented proof that they are wrong.

Let me give you an example.  I have a husband and wife that HAD excellent credit.  They had to move from one city to another because of the husbands job.  The couple tried on repeated times to negotiate with the bank for a loan modification so they could rent their house until the market got better then sell.  Great, but the bank refused to modify because of there excellent credit.  They hired me to sell their home as a short sale which I did.  After the sale the bank reported the sale as a foreclosure.  My client got on it right away and tried to get it fixed and reported as "debt satisfied short" which is the way a short sale is reported.  NOPE! Now they reported late payments which was not the case.  They always kept all their payments up even through the short sale process.  Let me tell you that this situation started 5 months ago and is still not resolved.

A perfect example of a major bank reporting incorrectly.

The truth is that no one can legally remove accurate negative information from a credit report.  Credit reporting agencies are obligated under the Fair Credit Reporting Act (FCRA) to correct or delete inaccurate, incomplete, or unverifiable information, usually within 30 days. They are not required to remove accurate information unless it is more than seven years old (or bankruptcies that are over ten years old).  This is the reality of the situation.

The consumer has a right to dispute the negative information reported on the credit  report and the credit reporting agencies must investigate the negative report at no cost to the consumer.

You the consumer can do all this.  It takes time and patience but you can work towards cleaning up your wrongfully reported negative credit at little cost to you.  This is exactly what a credit repair company will do.  Remember, they can not get negative credit reported correctly removed.  NO ONE CAN.

In my next blog I will write more in depth regarding "scamm" companies trying to rip the consumer off promising clean credit. 

Blog written by Marilu Nieto, The Home Biz Diva, an experienced Real Estate Broker having helped countless families in the span of 24 years of service. If you would like more information regarding debt relief and debt relief services, visit my informative site at ConsumerDebtReliefReview.

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CREDIT CARD DEBT, SHOULD I PAY OFF WITH AN EQUITY LINE ?

I am struggling with high interest credit card debt.  Should I pay it off with a low interest rate home equity line of credit.  That is a great question, and for the most part it makes a heck of a lot of sense.  Low interest rate and tax deductible interest payments on a line of credit versus high interest credit card payments.  All you have to do is tap into the equity you have in your home.  That is if you are one of the lucky one's whose home mortgage is not upside down.  What do I mean by this, "upside down"?  Well that is if you owe more on your home mortgage than what your home is worth.
If you do have equity in your home, you could obtain a line of credit on that equity to pay off your debt.  But is this a wise choice.  In my opinion, NO.

Credit card debt is not secured.  This means there is not anything backing the debt. The credit card companies have really no way of collecting the money owed other than sending a collection company to try and make payment arrangements with you.  If that is not possible after months of calling and sending correspondence, then they usually end up declaring the debt not collectible and writing it off their books.  This is not to say that another collection company may not buy it for pennies on the dollar and still try to collect from you.  They may take you to court and a judge may order you to pay or place a judgement against you, but that is it.  They do not have an enforeceable way to collect.
On the other hand, an equity line of credit is secured debt against your home.  This means that they can force you to pay by either foreclosing on your home or forcing you to sell your home in order to satisfy the debt.  The latter will only happen if you have equity in your home. 
Perhaps you may have a 401K retirement plan.  You may borrow against this plan and pay off your credit cards but once again.  What happens if you do not make the payments.  What if you lose your job.  Now it will be necessary to repay the 401K or run into tax issues with the IRS.

In many instances it may seem better to borrow from low interest equity lines, 401K or other retirement plans to pay off the high interest credit cards that you may have, but with so many variables at hand, it is my opinion to stick to the more conservative methods that I have outlined before in the blog dated Septemeber 23, 2011 CREDIT CARD REDUCTION TIPS

It takes patience, perserverance, determination and a focused and clear objective of paying off your credit card debt, and it can be done.

Eliminate Debt Fast Without Bankrupcy Or Debt Consolidation

The author of this blog is Marilu Nieto, and experienced Real Estate Broker with financial relief background. The objective is to offer quality information regarding debt relief.

Marilu Nieto,
Home Biz Diva, working with Plug In Profit

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