Are You In Need of Credit Counseling?

If you are inundated with debt you could be experiencing potentially the most stressful event that an individual can go through. Debt can wreak havoc on a marriage, bring about emotional pain and your money problems could lead to some physical ailments from the stress that you are experiencing. Luckily there are organizations, like a credit counseling agency, that you can turn to help you through these financial hardships and lead you towards the path of financial independence.

How can a credit counselor help?

One of the main goals of a credit counselor is to negotiate better terms with your creditors. A credit counselor will also try to enroll a consumer in a debt repayment plan, which can be used as a tool as you approach creditors to get better terms on your accounts.

What exactly is a debt repayment plan or debt management plan?

A debt repayment plan is pretty self explanatory, the credit counseling agency is the distributor of the consumer’s funds to their creditors according to the negotiation. The consumer now pays the credit counseling agency that will distribute the client’s monthly payments according to the newly arranged terms negotiated with the creditors.

Within the negotiation process, one of the main objectives in credit counseling is to negotiate lower interest rates for their consumers. Once the lowest possible interest rate has been negotiated, the agency will distribute the funds paying off the highest interest rate debts first to keep them from stacking up even more debt. The debt management plan has worked for thousands of people but it’s not for everybody. You really have to ask yourself if you really need credit counseling and evaluate if you would be better off doing all this yourself.

The main problem with taking care of your debt yourself-without the help of a credit counselor-is that many times a credit counselor knows how to negotiate with each individual creditor. For example, Capital One is notorious for not working with debt settlement organizations but they do occasionally work with credit counseling. There is the obvious benefit of working with a credit counselor that is proficient in dealing with creditors and knows what to and what not to say. The bottom line is, it is an asset for an individual to get helped from a seasoned negotiator. It’s similar to court; can you represent yourself in a court of law? The answer is yes, but in a high stakes case like you future livelihood, you probably want somebody with expertise in their field to help you.

Why credit counseling?

You really should do your due diligence before you make any major financial decision, same goes for credit counseling. You should probably seek the guidance of professional if you can answer yes to one or more of the following questions:

Is your debt situation starting to affect your relationships?
Has any lender ever denied you of credit?
Are you getting harassing phone calls from creditors that are getting out of control?
You are finding it hard to cope with your debt?
If you have made the decision to obtain credit counseling keep in mind that you have to also do your due diligence on the organization and make sure that they have their scruples intact. It would probably be in your best interest to seek out a non-profit credit counseling agency, but even the non-profits can be a scam so make sure that they are a member of the National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).

It’s also probably best if you ask for references. Any organization that you’re looking to do business with should provide at least one reference, if they don’t provide any references immediately or dodge the questions in any which way that should be a definite red flag. You should also check out the Better Business Bureau, or your State Attorney General’s office for any cases or complaints filed against the organization in question.

Another thing worth checking is always ask about their fees and make sure that they are forthright in their dealings as far as their fees are concerned. Most legitimate credit counseling agencies don’t ask for an upfront fee, but most have a suggested monthly donation when you are enrolled in a program.

Do not pay for anything up front until the terms of the agreement are clear and concise, and there is a clear expectation of what the credit counseling agency is going to execute.

Best Credit Counseling Companies – Credit Counseling Reviews

Many people believe that the decision to join a credit counseling company is one of the hardest decisions to make when in all reality it can often be finding the right company to use. Let’s face it if you have debt and can’t afford to pay your bills you need help. It really boils down to what program to join and with what company.

There are literally thousands of different credit counseling companies out there and that is why we have spoke with hundreds of them extensively about their programs to find out which companies are legit and which ones are not.

Below are the top 5 questions in which you need to ask any debt relief program before enrolling.

#1 Are you licensed to do business in my state? Might sound like a silly question but in order for a company to do business in certain states it requires them to have a license and be backed by a law firm.

#2 Do you have any accreditations? It is important that you are working with a company that is and has been accredited by its regulators in which it conducts business.

#3 Will this affect my credit? All debt relief programs will affect your credit whether you like it or not. This question is to test if they are telling you the truth.

#4 Do you get paid a commission? Sales representatives that are paid by commission are more likely to charge you more fees and place you into a program that does not make the most sense for you in order to make more money.

#5 How long have you been in business? We recommend that you do not work with a company who has been in business under 12 months.

Below are our picks and credit counseling reviews:

#1 Impact Debt Relief:
Impact Debt Relief gets our #1 vote due to there personal service, ability to work in all states and great track record within the industry.

#2 Eagle One Debt Settlement:
Eagle One takes the #2 spot. Smaller firm that can only work in a handful of states. Eagle One is a legitimate company but seems to focus on more of a smaller debt amounts and credit cards.

#3 Freedom Debt Relief:
Freedom rounds out our top 3 credit counseling companies. Freedom is one of the largest firms out there but what scares us about them is the amount of complaints with the BBB as well as some pending lawsuits. Still a viable source though.

We rated the top 3 firms based on fees, years in business, accreditation, and overall customer service. To read more about the above referenced companies or to receive a free quote visit our site below.

Credit Counseling Lies Exposed – The Shocking Whole Truth Credit Counselors Don’t Want You to Know

You’re deeply in debt, wondering which way to turn. You’re confused, worried, and so stressed out you can’t think straight. What do you do?

Many people mistakenly turn to credit counselors. Often people struggling with serious debt make the dangerous assumption credit counselors are “the good guys” because they advertise being “not-for-profit”. Other times debtors lured by the debt management companies believe a common “half-truth” (out-right lie) promoted by the credit reporting agencies and credit counselors alike about how such debt consolidation programs affect your credit. Do you know how your credit may be affected?

Before we look at the truth behind these deceptive claims, let’s clear up the terminology and eliminate any confusion.

You see, “Consumer Credit Counseling Services” goes by many names… but ALL of these different names are really the same thing. These many names include credit counseling, CCCS, debt consolidation, debt consolidation plan, debt consolidation program, debt management plan, DMP, debt management program, and of course the infamous “Non-Profit” Credit Counseling Program.

The Truth About How Credit Counseling Affects Your Credit

While enrollment in Consumer Credit Counseling Services no longer affects your numerical credit “score”*, being enrolled in “CCCS” has a VERY DAMAGING impact on your credit “worthiness.” Credit worthiness is your ability to get a loan.

(* This is assuming that the credit counseling agency actually makes your payments on time – which is often NOT the case, as many, many people who have mistakenly enrolled in such debt management plans report.)

Why does enrollment have such a damaging affect on your credit worthiness?

· Statistics show it’s most likely that you will never complete your debt management plan and will most likely file bankruptcy instead.

· Some statistics report 7 out of 10 people who enroll into debt management plans fail to get out of debt.

Just ask ANY mortgage lender in the country…

When pulling your credit report, EVERY ACCOUNT included in your “debt management plan” is listed just as a bankruptcy would be, with a notice under each account saying something similar to:

“THIS ACCOUNT IS INCLUDED IN CONSUMER CREDIT COUNSELING SERVICES”

This means big trouble for you. Lenders call this a “walking bankruptcy” because it’s a *major red flag* indicating you cannot manage your money and had to hire a third party to do it for you. Plus, you still owe the debt and are at a much greater risk of filing bankruptcy in the near future.

How will these negative credit entries affect you?

You will pay much more in fees and interest rates, if you are able to obtain credit at all, during the 4-7 years you are enrolled in your debt management program.

Who’s Hiding This Hurtful Half-Truth (Outright Lie) From You?

Credit counselors, your creditors & the credit reporting agencies are all in cahoots together. They all promote the half-truth that CCCS does not affect your credit score. The vast majority, including the credit reporting agency websites fail to mention the rest of the story.

While it is true that credit counseling has no affect on your credit score, that’s only half of the truth.

WHY?…

Because credit counseling has a major negative impact on your credit worthiness.

The Truth Regarding So-Called “Non-Profit” Credit Counselors

Don’t be fooled by the words “non-profit.” Claiming a debt management plan is “not-for-profit” is ridiculous, but it’s fooled many people into making poor money choices.

· The IRS has revoked the non-profit status of over 50% of the credit counseling industry in the past two years.

· The IRS is conducting an investigation of the entire industry!

Here’s the PROOF “they” don’t want you to see:

· Debt management programs were created by the credit card industry back in the 1950’s

· The credit industry lobbied congress to achieve their touted “non-profit” status for the debt management programs.

· They are really a collection arm for the credit card industry.

· Next to minimum payments on high interest credit card debt, Credit Counseling is how creditors make most of their profit!

· Their CEO’s are paid VERY WELL from the kick backs they receive (called “fair share”, usually 15% of all payments received by you) — from YOUR creditors!

· Plus, aren’t you paying a $35-85 monthly FEE?

How’s that a non-profit?

On top of these costs to you, many credit counselors ask their customers, who come to them deeply in debt, for a “donation” to their “non-profit” organization. Often, these agencies pressure their customers into making “regular donations.”

Is this acting in your best interest?

A Secret Credit Counselors Were Able To Hide For A Long Time

The goal of these programs is to:

· Fool consumers into paying back 100% of their balances PLUS interest when they’re in deep financial hardship, instead of filing bankruptcy or seeking debt settlement when such options may be much more appropriate.

A lot of profit has been made from these “non-profit” debt consolidation programs over the years. The banking and credit institutions, credit reporting agencies and those politically sensitive to these corporate lobbying giants all promote such debt management plans because that’s how they stay in business.

In 2004, PBS FRONTLINE and The New York Times produced “The Secret History of the Credit Card” and went on to win 2004-05 Grammy for Outstanding Investigative Journalism. (Google “The Secret History of the Credit Card” to watch this program for free online – great information you’ll wish you had known sooner if you’re dealing with credit card debt.)

Now the truth is out, but your creditors are still hoping you don’t find out…

Is There A Better Alternative Than Credit Counseling?

Now don’t get me wrong, debt management programs can be a great thing for certain people. Could credit counseling be the best option for you?

Sometimes, if a person cannot qualify for a better program to eliminate debt faster, at a lower cost and a lower payment with less credit damage, credit counseling may be best.

It may not be. I’ve helped many people get out of debt through credit counseling over the years, but only after they were educated on the all of their options, and the whole truth about each. I personally consider it unethical to promote a single solution instead of looking at an individual’s specific circumstances and situation to discover the exact solution best for them.

Share these facts with the people you know before someone else becomes another sad statistic!

Learn the difference between “credit rating” and “credit worthiness”, and learn how credit works so you can have it work for you.

Are you 100% certain Consumer Credit Counseling Services is the best option for you to get out of debt? If you want to get out of debt ASAP, then you should know other options are available.

Best Credit Counseling

To deal with credit counseling, you should first come to know about what it is. This is a supportive process, in which a counselor helps a person to assist him\her to solve their personal issues, or to improve the person’s attitude, behavior or character. There are many types of counseling like: credit, Christian, co-counseling, psychology, behavioral, career, disciplinary, e-mail, ecological, exit, genetic, grief, community, marital, mental health, narrative, Navy, online and there are some more types as well.

Credit counseling is a process in which the studies or education is offered to consumers to know how to avoid some incurring debts which cannot be repaid. This process is more of debt counseling than credit counseling. It always involves dealing with creditors to establish a good or nice debt management plan for a consumer. Debt management plan is also denoted as DMP. A DMP can help the debtor to repay his\her debt by working on a good repayment plan accompanying with the creditor. DMPs say that they are set up by some credit counselors. They are usually offered some reduced payments, fees and the interest rates to their clients. Credit counselors always refer to the terms which are dictated by the creditors to determine the payments or the interest reductions which are offered to the costumers in a debt management plan. There are also some common features about the debt management programs.

The creditors have some close call to all the customers accounts and they will restrict the account to future changes. After joining the D M P., the main common benefit of a D M P is it is advertised by most of the agencies is the consolidation of the multiple monthly payments in one monthly payment, which is often less than the sum of the individuals monthly payment which was previous paid to the customer.

The first ever credit counseling agencies was created in the year 1951 in the United States of America. When the credit grantors created the national foundation for the counseling or also known as the NFCC. The first ever local counseling franchise was emerged in the year of 1960s. It also offers the education and the counseling direction to the consumers itself. Then later in the year of 1993 the association of the independent consumer credit counseling agencies or also known as AICCCA was founded in the same year.

Cautions which are also regarding for the credit counseling {Canada}: The financial consumer agency of Canada {fcac} always advises to do their homework about the credit counseling services before entering into an agreement. To check every line and every word of a single agreement.