When getting help with your credit, know your options
Credit Counseling: Counselors provide advice to help you manage your money and consolidate credit card debt. They can assist you in developing a budget, and offer free educational materials and workshops so you can understand how to consolidate credit card debt in the most advantageous way possible. These counselors are certified and trained in the areas of consumer credit, money and debt management, credit card debt consolidation and budgeting. They discuss your entire financial situation with you, and help you develop a personalized plan to consolidate credit card debt and solve your money problems. These companies help "manage" your debt by taking one monthly payment from you and distributing the money among your creditors, with whom they've often worked out lower payments and lower interest.
Credit Card Debt Consolidation: Rolls up your existing debt into a new loan product. When you consolidate credit card debt your monthly cost of credit is lowered by extending the length of the loan. Typically, you have to offer collateral, such as your home, to secure a debt consolidation loan. Any time you cannot make payments on a loan with collateral, you lose your collateral. Remember, you can’t borrow your way out of debt.
Credit Repair: Companies offering to repair credit are usually disputing inaccurate or incomplete information on your credit report. You can do this for free. You don’t need to hire someone to do this for you. Remember, there is no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.
Debt Settlement: A claim that can be arranged for your unsecured debt — typically credit card debt — to be paid off for anywhere from 10 to 50 percent of the balance owed. There are no guarantees. Most debt settlement companies charge consumers substantial fees for their services, including a fee to establish the account with the debt negotiator, a monthly service fee, and a final fee of a percentage of the money you’ve supposedly saved.
Bankruptcy: A process established by a set of federal laws that is designed to cancel many of your debts through an order of the court. Bankruptcy also allows creditors who are owed money a chance to get their designated share of any money the debtors can afford to, or are obligated to, pay back.
Tag : www.consumercredit.com