What Single Moms Need to Know about Using a Debt Management Service
Contributed by Lisa Marie
Are you considering using a debt management service to repair your credit?
There are so many of them out there- there's a debt management service on television every time you change the channel. They pop up when you are surfing the net. They're even in your email and you never even know how they got there.
They seem great! You tell the nice person on the phone all about your financial woes. Your credit cards are all maxed out- your car is three weeks from being repossessed, and your mortgage is severely past due. The nice person says that they feel your pain and can definitely help you out. They lower your credit card interest to almost nothing, negotiate a new monthly payment with your creditors and give you a monthly payment that combined them all so you don't have to worry about making 15 small payments, just one larger one.
Month after month you receive statements in the mail showing your balance actually dropping! Your payment is actually making a difference now! You pay off a few smaller of the bills and redirect that portion of the payment to one of your larger balances. Things are looking good now! Your credit is on the road to being fixed...or is it?
How a debt management service can actually make your credit worse!
How could this be possible? These people at debt management services are providing a valuable service, right? This can't be bad for your credit, right? Unfortunately what the wonderful representatives at the debt management service fail to tell you is that many of the creditors actually report this to the three major credit bureaus (Equifax, Trans Union and Experian) as a negative point that goes against your credit report.
