6 Bad credit repair mistakes that you should avoid

There are many people who have bad credit and poor credit scores. This can be because of various reasons: credit cards, medical bills with no insurance, divorce, etc. They try to repair bad credit as soon as possible. However, there are some things that they can’t afford to do while going through a bad credit repair process.

This article highlights six bad credit repair mistakes that one should avoid at all cost.

Bad credit repair mistakes

The six bad credit repair mistakes that you should avoid are given below:

1.Disputing everything on your credit report: You should not dispute everything on your credit report because of two reasons. Firstly, the credit bureaus might dismiss your dispute as frivolous. It cannot be possible that all the informations in the credit report are wrong. Secondly, there are some positive accounts that are helping your credit score.

2. Closing credit card accounts: You will lower your credit score by closing your older credit cards or a credit card with a balance.

3. Balance transfer: A lot of people transfer credit card balances so as to avoid making payments. This is a wrong move as the balance transfer fees are added to the balances each time they transfer them. Thereby the total amount of debt increases.

4. Not checking your credit report: You should check your credit report or you will not be able to figure out where to start repairing your credit. You can’t know about the items you need to focus on so as to improve your credit.

5. Filing bankruptcy: You must not use bankruptcy as a bad credit repair tactic. You might not get credit cards and loans as bankruptcy remains listed in the credit report for around 7 – 10 years.

6. Cutting up your credit cards: There are many people who don’t use credit cards at all while going through a period of bad credit. This may be a wrong move as without credit cards, they might not get new loans or other types of credit.

These are the six bad credit repair mistakes that one should avoid at all cost while going through a bad credit repair process.

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What you should know about consumer credit counseling agencies. How to keep from falling further in to debt and protecting yourself from being taken.

Consumer Credit Counseling is a service that helps an individual understand their debt and hopefully effectively end their debt through numerous programs and resources.

These debt management resources can span anywhere from debt consolidation, debt settlement and/or debt negotiations programs. In addition, a  Consumer Credit Counseling Service  is designed to help you understand how you got in to debt in the first place and how to stay out for good.

The problem of consumer credit counseling can lie in two places: Your personal habits as a consumer and the agency itself. Many individuals fall in to debt from situations that couldn’t have been avoided such as loss of a job, death in the family, and other unseen financial troubles. However, some people get in to debt and dig further due to personal spending habits and living "outside their means." This is a downward spiral of credit card payments, higher interest rates, and a stack of bill every month. The end result of this life pattern often leads to so much debt, the consumer only has two options, seek professional help or file bankruptcy.

Another concept to keep in mind is that even though consumer credit counseling agencies are often non-profit organizations, they are creditors often working on the side of the very credit card companies that you owe. The intention still may be there to trap you in to more money that you can’t afford. It is not being said that all companies only have selfish intent, just to be aware of where the source is. Most Credit Counseling companies are legitimate companies that strive to get you out of debt, but some may not be.

So how can one benefit from Consumer Credit Counseling and still remain safe? First of all you may need to take a retrospective look at your life and decide if you are really willing to change your spending habits no matter what the cost. This is the hardest part, changing oneself. The consumer credit counciling agency should be able to assist you with ways to change your lifestyle and avoid making these mistakes again. This part takes real commitment and a driven purpose. Secondly you have to do your background research on the credit counseling service you’d wish to participate with. Check with the better business bureau, personally interview them, get an exact idea of how they will help you and what the costs are before you give them any information at all. By doing a good background check on the business behind the non-profit organization, you can get a good idea of where to start. The process of getting out of debt is never an easy one, however with a little personal investigation in to the organization as well as yourself, the chances are best that you will end up on top.

  Consumer Credit Counciling

 By Gabe Killian
Published: 8/17/2006

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Credit counseling may very well be the answer for this type of situation. Credit counseling is designed to help correct your problem without impacting your credit score and may actually help improve your credit score.

Credit counseling works by ensuring that all of your creditors are getting paid on time, eliminates the trap of revolving credit and helps you to learn to over come your credit problems.

Upon entering into a credit-counseling program you will be asked for financial details and to surrender most of your credit cards. Almost all programs acknowledge that you need a credit card or two for business or travel and will not try to restrict your ability to work and live in a reasonable fashion. Once your situation is assessed a plan will be made so that your will be debt free in three or four years and you will be offered the help you need to keep out of the situation that you are currently in.

While your credit score will not be effected an entry will be placed on your file. The entry on your file will generally say "DMP" or "credit counseling". This entry is put there to stop you from obtaining additional credit cards. Once you have completed your credit counseling this entry is generally removed or updated to reflect that you have finished the program.

One thing that will effect your credit rating is the promptness of your credit-counseling agency. When you are in a credit-counseling program you will give the agency a monthly check that they will use to pay your creditors. If the agency does not pay your creditors on time or in full your credit score will be impacted. Be sure to check out the history of your credit-counseling agency to avoid this.

As you might assume, committing to a credit-counseling program does require a lot of work and conviction from you. The hardest part for many people is to break the habit of reaching for a credit card to pay for a bill that just came in the mail. The second hardest thing for most people to do is to learn to live within in their means. Everyone likes instant gratification and often we feel entitled to it, but perhaps if we had shown a little more discipline in the first place we wouldn’t need credit counseling now.

As you can see, credit counseling is a good and reasonable option if you find yourself with too much debt. Credit counseling will not effect your credit score and will ultimately make you a better person as you will learn better skills for handling your money. If you find yourself slipping into revolving credit card debt problems make sure you take the correct steps to resolve the problem before you are forced into bankruptcy.

Eliminate Your Debt
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

 By Jakob Jelling
Published: 4/20/2005

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Debt management programs have been around for years and offer help to individuals trying to get out of debt. How do they work and how will enrolling in one of these plans affect my credit score?

They usually begin by setting up an initial consultation. Here a financial counselor will break down your income, living expenses, debts and discuss strategies to reduce spending and allocate more money to paying off your creditors. At the end of the meeting you are given a budget along with an action summary plan to help initiate your route to financial freedom. Many find that this one time meeting is enough and the advice of the counselor can be handled out on their own. Others see a benefit in actually enrolling in the debt management program.

A debt management plan is a reasonable way to resolve credit problems and get back on track financially. Your financial counselor will act as an impartial intermediary. Based on your income they will negotiate and establish a mutually accepted repayment plan with your creditors. Upon agreement, you make a single payment to the debt management company and they in turn make the monthly payments to all creditors that were enrolled in the plan. Best case scenario is that collection calls stop and ultra high interest charges and fees are reduced or every now and then eliminated altogether.

There are pitfalls to enrolling in the debt management plan. We have experienced many situations where the creditor accepted the plan, stopped collections calls and even reduced the interest but would not report the monthly payment to the credit bureaus as the minimum monthly payment. More than likely the new monthly payment to the creditor is less than what it was before as a result of the restructuring program. Each month the creditor could be reporting you 30 or more days late because of it. You’ll have no way of knowing it unless you frequently monitor your credit report.

If you are one of the many people in need of restructuring your debts be sure that you enroll in one of the credit monitoring plans available through Experian, Equifax and Transunion.

By: John Rasor

Article Directory: http://www.articledashboard.com

www.creditscorecowboy.com/ is your source for free credit scores, credit monitoring, identity theft software your free credit report and a blog with a wealth of information about credit. People around the world depend on us for expert advice on how to maintain a healthy credit score.

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Profit versus Non-Profit

When looking for a credit counseling service, a person needs to find a non profit service. These organizations are in the business to help people, not to profit off of their misfortunes. They don’t normally have fees and if they do, they are small, and there is more one on one attention.

Getting the Credit

If a service is reputable it will be a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA), and the National Foundation for Credit Counseling (NFCC). In order to be in these two groups services must have there ISO 9001 certification or Council on Accreditation. These are accreditations that mean that they are complying with all rules of their industry. If a service does not have these or is not a member of these groups, they are probably not the right service for you.

Counselors

The counselors at these services should be certified by groups such as the Associations for Financial Counseling and Planning Education. It is also important that your counselor did not receive a bonus for signing you up for the service. If you wanted a salesperson you would go to a car dealership!

Cost

Most services do not charge, but for those that do, never pay more than fifty dollars for their service. Also make sure that your first month’s payment actually goes towards your bills and not the service. This has been the problem with some companies in the past.

Debt Free…when?

Finally, a good credit service will have you debt free in five years (in most circumstances). Make sure you are aware of how they plan on doing that, and request monthly statements showing your progress.

By: L. Sampson -

Article Directory: http://www.articledashboard.com

Visit Debt Sanity to view our Recommended Debt Consolidators online. Also, visit Debt Sanity for more information on Counseling Credit Debt Services.

 
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