Credit Counseling Companies in the Hot Seat - Do They Really Help You Repair Your Bad Credit?
Contributed by Deborah Zeitler
Study finds that some credit counseling agencies take high fees, give bad advice, and do little to help consumers repair their credit
Consumer credit counseling agencies are non-profit companies that exist to help consumers to get out debt and repair their bad credit. A study by the Consumer Federation of America has uncovered some alarming facts about a new generation of credit counseling companies that have sprung up in the last decade. While there are many fine companies that provide credit counseling to consumers, if you're trying to repair your bad credit it's important to choose a reputable company.
Credit counseling scams are on the rise. Instead of repairing your bad credit, some companies may even make your credit worse.
Consumer credit counseling companies operate as non-profits, but in the study by the Consumer Federation of America it was discovered that many of these companies actually operate as for-profit agencies. When your credit is bad and you're trying to repair it, the last thing you need is for your credit counselor to add to your burden of debt. Beware of unreasonably high fees and payment schedules that aren't realistic for your situation.
Most credit counseling companies do a good job of helping people to repair their credit
While it's true that you have to be careful to choose the right credit counseling service, the fact is that there are many companies out there who really are excellent at helping people repair their credit and get back on their feet. In addition to helping you work out a payment schedule with your creditors, they can also counsel you on budgeting, to help prevent the need for their services in the future.
