Not Enough Credit Card Deals In Your Mailbox?

July 13, 2007

If you watch any amount of television or pay attention to the media at all, you are fully aware of the onslaught of credit repair information that is available to the public. You may even get notices for credit repair companies in the mail each day with the stack of credit card deals.

Each of these companies claims that they can fix bad credit and they will do so quickly. If you have poor credit, you are probably not going to do as much research as you need to in order to determine how legitimate these credit repair services really are. Your desperate mindset is what some of these problematic services feed off of; be prepared to do your research and find a legitimate repair company.

Sadly, if you get stuck with a credit repair company that does not happen to be very reputable, you could have an even worse financial situation than before you consulted the credit repair people. True credit repair companies are willing to provide you with free information about their services and will offer debt management help.

You will work closely with the company in order to come up with a budget that you will be able to mange effectively, thus allowing you to pay off all of your debts after a certain period of time. The people working for these companies will be offer many different solutions to your bad credit dilemma; the only hard part is figuring out the difference between these legitimate credit repair companies and the ones that claim to help but only put you in an even less-desirable position.

If you find a legitimate credit repair company, you will be able to get your situation reviewed for free. The person that you are working on your case will be able to offer you advice and give you some possible options to help you rebuild credit. One possible solution is debt management. To set up a Debt Management Plan (DMP), you will be charged a monthly service fee and application.

It is not necessary that you go through with this debt management, so do not continue doing business with a company that is pressing the issue of a Debt Management Plan. Analysis should be free as well; find someone else who is willing to look at your situation for free if a company wants to charge you for looking at your financial situation.

Do You Need A Credit Repair Company?

A credit counselor at one of these companies may suggest a Debt Management Plan. A good credit counselor will not force you to go through with this plan, but it may be a good idea to go through with it if you have debt that you simply cannot manage any longer. These counselors work with creditors and set up a payment schedule that is realistic for you. Over time, you will be able to pay off your debts and in most cases, the credit counselors have worked out deals with creditors that include lowered interest rates for the debtor.

These plans will definitely help you pay off your debt, but it can take a long period of time. However, you will probably find yourself debt-free after you are done paying back all of your debts. You will most likely not be able to get any credit during this repayment period because you will still be cleaning up your record. Some people, though, do end up being eligible for poor credit, no credit, or bad credit credit card deals. The best part is that you will not have to worry about bad credit after this period is over. Essentially, the slate will be clean and you can once again build your credit back up to a respectable level.

Beware Of False Claims

Some firms will claim that they can take any negative information off of your credit record. These credit companies file disputes with any negative aspect of your credit history and sometimes do manage to get it taken off. However, the success is short-lived because once the major credit bureaus look at your record they will notice that some information needs to be put back onto your report. Just like that, you are once again stuck with your bad credit information. Of course, these companies will charge you a fee to perform this inefficient action. Once the credit bureaus have restored your negative information, you should not be surprised to find that these illegitimate credit repair companies are unable to return your phone calls.

These companies will also advise you to stop paying your debt to your creditors. They will then contact the creditor and tell them that your debt is uncollectible. The creditor may lower your balance and you will be left not having to pay as much as you thought. Your credit score will still be bad and the IRS takes notice of this event too. The extra money that you receive because of your reduced balance can be considered income, giving you a new tax obligation.

Steer clear of these companies that claim to wipe away all of the negative information on your credit report. It simply cannot be done unless you spend a long period of time paying off your debts and building up a better credit score. Don’t fall into the trap of paying up-front fees to companies for advising you on your financial troubles. The best credit repair companies are willing to look at your case for free.

Do The Research

Good credit counselors can be a lot of help, but you cannot expect them to fix all of your problems. They can give you plenty of advice and lead you in the right direction, but ultimately it is up to you to improve your credit history. DMP’s can be a good solution for some people, but credit counselors should never push clients into doing this. If you feel that the person is trying to make you do it, move on and find another credit repair company. There are many legitimate services out there; it is up to you to do the research and find the ones that will help you the most.