You can find firms that offer credit repair solutions and services for people who need help to enhance their credit score, overcome bad credit, or manage their finances more efficiently.
Some agencies exclusively offer credit counseling services. On the other hand, other companies also provide other credit card debt relief programs just like debt consolidation, debt settlement and debt management program.
Keep in mind that not all agencies offering debt help services are legitimate.
Some of these do not actually have a license to function and don’t have your best interests as the primary goal. Illegal agencies are after one thing- making huge profits at the expense of customers who require help to get out of poor credit.
Before choosing a credit repair company, it’s important to understand the exact kind of service offered and the results you can expect afterwards. Consumers must also be aware of their rights and limitations to avoid being scammed or ripped-off.
For instance, you will find agencies and credit counsellors who make outrageous promises to individuals who are desperate to regain good credit.
However, if an agency makes such claims, it is a clear sign that you are dealing with a fraud. Keep in mind that no person or credit repair agency can magically transform bad credit history or a poor credit score into good credit.
If you have poor credit standing because you have debts in your accounts that are long overdue, then the only way you can recover from bad credit is for you to pay your creditors. Unless the charges in your accounts are incorrect, there is no way these can be magically deleted from your credit report.
As a borrower, you are still accountable to pay your debts regardless of how difficult your current financial situation is.
However, a credit counselling agency can help you create a debt repayment plan suited to your situation. A counselor will also be able to give you advice on how you can minimize your expenses so you can focus on debt repayment. A trusted credit counselor can also teach you strategies on how you can effectively negotiate with your creditors.
Watch out for agencies who claim to be “non-profit” credit repair organizations.
Just because the agency bears the tagline “non-profit” is not a guarantee that it is legitimate and that you can let your guard down. Some scammers may pretend to operate a “non-profit” credit repair organization when in truth it imposes excessive fees in exchange for its services.
Some agencies that offer debt consolidation loans or debt management programs may impose hidden fees.
Remember that debt consolidation or DMP is not always the solution to bad credit. In some cases, you can get yourself out of bad credit without acquiring a debt consolidation loan or without enrolling yourself in a debt management program. Some credit counsellors earn commissions based on the number of people they recruit in the agency’s DMP or debt consolidation. Obviously, these counsellors may recommend DMP or debt consolidation just to earn extra money even when other solutions are available.