Credit Repair Online - Consumer Credit Counseling

If you are drowning in a sea of debt, a credit counseling agency could be just the thing to throw you a life preserver and help you salvage a debt free life. More and more people are relying on agencies for their expertise in dealing with lenders and ability to help consumers simplify their budget and get out of debt. As with most money matters, there are a variety of different options and it is important to find a reputable service that best fits your needs.

How Consumer Credit Counseling Can Help Repair Your Credit

During a typical consumer credit counseling session your counselor will offer you basic budgeting and money management advice to help repair your credit before breaking down your debt, expenses and sources of income. Your counselor will work with lenders to negotiate for lower interest rates, to extend the term of your loan and/or eliminate late fees.

Your counselor can then advise you on any additional programs or options the agency might offer. You may choose to enroll in a consolidation program in which you would make one monthly payment and the agency would pay each lender individually. The advantages of such a program are similar to a debt consolidation loan but without the hassle of taking out a loan. Most agencies offer this service for a nominal monthly fee.

Signs of a Credit Counseling Scam

Falling for a scam could leave you in a worse situation than you started in. Follow these pointers to avoid scams:

• Go with someone you know. Find out what local agencies are members of the Founding for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. These associations are comprised of the most trusted and respected agencies in the country.
• Be wary if something looks too good to be true, because chances are it probably is. Organizations that claim they can make your debt disappear will probably make your money and/or identity disappear as well.
• Look into an organization’s background. Many nonprofit companies are backed by credit card companies and are trying to recoup as much of the total debt as possible.
• Ask to see accreditation documentation. Producing such documents should be no problem for a reputable company.
• Seek out hidden charges. Review your paperwork closely for hidden fees and pay attention to where your money is going. Some debt consolidation services will charge up to 15 percent more than they are actually sending to the creditors.
• Do not pay for services up front. Legitimate credit repair companies will never ask you to pay for a service until after they have provided it. In fact, you should be wary of any company that doesn’t provide their services for free or at an extreme discount.