canstockphoto21350556Credit counseling services are often receiving mixed reviews. There are many reputable services out there. You should take precaution since there are also credit counseling companies with a bad reputation. Credit counseling is now required before filing for bankruptcy If you’re looking for help dealing with your outstanding debt, be aware of the advantages and pitfalls of using a credit counseling company.

Pros of Credit Counseling

1. Credit counseling services make it easier to negotiate with creditors. Some creditors are willing to discuss payment plans with credit counselors. You may get a better deal and more breathing room by using a credit counseling service.

2. Make it possible to consolidate your payments. Many firms will allow you to consolidate your debt into a single payment each month. You will be making a payment to the credit counseling company. Remember, the credit counseling firm must make all of the individual payments on your behalf.

3. It can make it easier to get a new line of credit. One of the benefits to getting credit counseling is new credit will be secured for you. They will actually work to have your credit card applications approved.

4. Put a stop to harassing calls. The bill collectors will leave you alone once you’re on a repayment plan. You can easily do this yourself by making a request in writing.

Finding a reputable and honest credit counseling service can be helpful for getting out of debt. There are many advantages to using a well-qualified credit counselor. But there are also some disadvantages to watch out for.

Cons of Credit Counseling

1. The creditors may not receive your payments. There are numerous complaints filed each year of credit counseling companies failing to send the payments to the creditors.

2. They may not deliver on their promises. Some companies will use tactics to get their hands on your money by false advertisements that’s too good to be true. After the credit counseling company get their portion, your situation may remain the same.

3. It can possibly affect on your credit rating. There is one method that can make your credit worse. The credit counselor may suggest for you to stop making payments on your debt and put the payments into an account instead.

Your counselor would approach by suggesting to pay off the debt at a reduce amount once a large lump sum is accumulated. Your credit will suffer due to nonpayment during this process. Make sure that you choose a reputable credit counseling firm since the money in the account is under their control.

As you can see, the potential drawbacks are serious. It’s very important to do your own research to find a reputable credit counseling service. Many consumers are led to believe that a service with a non-profit status is reputable. You should remember that a non-profit is a company isn’t about earning a profit.

You’ll be able to find a counseling service in your area that you can visit in person. Checking with the Attorney General and Better Business Bureau is an effective way to see if there are any complaints or legal action taken against the company. Doing an online search can also help you find complaints and negative reviews from consumers.

Ask about the fees and the services that they offer. Also find out how many of their employees are paid a salary. Are they compensated for signing their customers up for certain services? Make sure you receive it in writing since verbal promises can be conveniently forgotten and hard to prove.

Credit counseling can be beneficial or challenging to your goal of eliminating debt. Find a reputable credit counseling firm by doing your own research thoroughly. Following these tips will move you in the right direction.

How to Boost Your Credit Score

canstockphoto8042110If you’ve recently tried to buy a home or purchase a new car only to find out that you weren’t qualified, this can leave you surprised and disappointed. Building and maintaining a good credit score is important in our everyday lives. You will need it to purchase a new home, pay for your education and some jobs require their employees to maintain good credit. Rebuilding your credit isn’t hard to do. Here are five ways to Boost Your Credit Score.

 

Check For Errors

Checking for errors is one of  the best methods you can use to Boost Your Credit Score. If you don’t stay up to date on your credit report, there may be errors that you aren’t aware of that’s lowering your credit rating.

If it shows that you made a late payment for something that you paid on time, make sure that you get it straightened out. You should check your credit report with Equifax, Experian and Transunion at least once a year to ensure the information is accurate.

 

Make Payments Promptly

Making your payments on time consistently is another way to boost your credit score. When you are making a purchase with your credit card, pay it off as soon as possible. Many people view their credit card as an ATM since it’s a convenient way to pay for their purchases.

You should always keep the credit card balance lower than half of the credit limit. For example, if your card has a $5,000 credit limit, you should maintain a balance below $2,500.

 

What if you have a history of making late payments? You should simply start making your payments on time. It may take some time, but your score will eventually turn around.

 

Get Rid of Any Open Accounts

There may be things that you haven’t paid off that has a negative impact on your credit score.

What if you don’t have the money right now? It isn’t necessary to pay the total amount. Just pay whatever you can until the balance is down to zero. Neglecting your bills will reflect badly on your credit.

 

If you are receiving harassing calls from the bill collectors, avoiding the situation won’t make it go away. Negotiate with the company on when you will be able to pay off the entire amount that you owe on the bill. If the bill collectors cross the line, then you should hire your own attorney to handle the matter.

 

Raise Your Credit Limit

Raising your credit limit will improve your debt to credit ratio and enhance your credit score almost immediately. You should keep in mind that your credit card company may not approve your request, but it won’t hurt to ask.

If your request is approved, stay disciplined. You may be tempted to overspend now that your credit limit is higher. Make sure that your spending habits are under control. Getting a higher credit limit only helps if you are a Smart Spender.

 

Don’t Cosign Anything For Anyone

You can prevent yourself from getting bad credit if you just say NO. Friends and family with a bad credit history of their own may ask you to co sign for a loan, new car, or even a cell phone. You should never co sign for anyone to get anything on your credit. If the banks aren’t willing to take a chance on them, then you shouldn’t either.

 

Making your payments on time, raising your credit limit, getting rid of open accounts, and checking for errors on your credit report are a few ways you can Boost Your Credit Score. Use these methods to your advantage and watch your credit score skyrocket much sooner than you imagine.