More Articles 28 August 2015 4/4.1033 4/4.1033 Source: iStock
1. Your credit score won’t get destroyed
If you’re scared of getting credit counseling because you’ve heard it wreck your reputation you can breathe easily. This long-held theory just isn’t real. Money counseling isn’t going to ruin your money. Nonetheless, you should know that the steps you take after consulting a credit counselor might have an effect on your score. Of example, if you decide to settle your debt for less than what you owe you will receive a negative mark on your credit report after looking over all of your options with a counselor and your score will drop. For example, if you have a credit score of 780 you could lose as much as 160 points from your score after settling your debt.
Many firms dealing in credit repair will attempt to pass themselves off as credit counselors. Don’t buy anything they sell back. While a credit repair company may be able to help you identify and correct errors on your credit report that may boost your score, this should not be confused with the services offered by a licensed credit counselor. Credit counselors go through all of your assets and liabilities to help you develop a plan to manage your debt while a credit repair company is primarily concerned with identifying and correcting errors on your credit report “often at a high cost.” Know that credit repair fees are a waste of your hard-earned cash. You can free of charge find and correct any errors on your own. Get started by downloading a free copy of your annualcreditreport.com credit report. 4.
Credit counseling should not be costly
4/4.1034 Source: you should be provided with iStock Credit advice at low or no cost. If you’re asked to pay upfront fees for hundreds of dollars, you’re definitely coming across a scam. Remember that the credit counseling fee is not the same as the debt management package you are paying for. The debt management program fee is what you pay every month after your creditors have been informed and the credit counselor has arranged for one low monthly debt payment for the debts you are having trouble managing. 4.