There is no shortage of credit counseling companies offering to help you lower or wipe out your debt. CCCS or Consumer Credit Counseling Service works with clients to greatly reduce interest rates on consumer debt – sometimes wiping out the interest rate altogether.
What is a CCCS debt management solution?
The role of a a credit counselor is to serve as a mediator between you and your creditor(s). The goal of credit counseling is to develop a plan that will allow you to repay your debts in full.
There are two types of debt management solution plans:
CCCS Debt Management – Credit Counseling Tips
25-01-2010 by adminDebt Negotiation
09-01-2010 by admindebt negotiation happens in two basic ways: by a professional, or by yourself.
Here are a few strategies the professionals use when handling a debt negotiation on your behalf.
In this discussion, we are only looking at “unsecured debts”, which includes credit cards or medical debts most commonly. It simply means any debt which has no collateral, such as a car loan, home loan, boat loan, etc.
Before you start any debt negotiation, you should expect that you’ll take a “hit” on your credit score. Any creditor who lent you money is not going to just let you get out of paying any less than the full balance and let you retain perfect credit.
That said, all credit automatically repairs itself when all future payments are made on time. In many cases someone can suffer credit damage from a debt negotiation and within two years, provided all future payments are made on time, have an excellent “A+” 730+ fico score.
In addition, many people confuse credit “Score” and credit “ability”. If you have a perfect 850 fico score, but do not qualify for more financing because you are carrying too much debt already relative to your income, then you have zero credit ability. Frankly, the creditors have worked hard to make you believe these are the same, so that you keep paying. If you are looking for debt negotatiation, you are probably carrying too much debt. If you’re willing to stop using your credit cards for a while and don’t plan to buy a home or car in the near future, then it may save you many thousands of dollars.
The most common strategy the professionals use is to stop making payments, and instead save the money up so that a single lump-sum payment can be offered.
In addition to this, a debt negotiation professional will also prepare a specially formatted letter containing a legitimate reason why you could afford the debt before, but cannot afford it any longer, and if things continue, it will end in bankruptcy or charge-off. This usually contains a factual story, referred to by professionals as a “hardship”. This can include medical events, loss of job or income, dramatic increase in expenses due to some sudden unforseen reason i.e. divorce or adjustable mortgage changes, or a natural disaster.
There are a few reasons why a debt negotiation professional can reach a better, lower debt negotiation settlement offer than you doing it yourself.
First, debt negotiation companies deal with thousands of clients at a time, so they’re able to reach higher up the chain of command. A consumer will usually reach a lower-level technician, who is not authorized much leeway for debt negotiation. An attorney or non-attorney professional can speak with a vice president because they are offering sometimes hundreds of thousands of dollars spread over many accounts based on certain status and net discount amount.
Second, debt negotiation companies know how to say and how to package what needs to be said, at the right time, to the right people.
Third a debt negotiation expert knows the system and averages for each company. A creditor has the legal right to sue you in court for non payment, which could result in a legal judgement, which can mean garnishment of wages directly from your employer, additional court fees, and more credit damage. A professional debt negotiation company can minimize the risk of being sued while still reaching a settlement around 42 cents on the dollar.
Last, because a debt negotiation company has either attorneys on staff, or non-attorney trained negotiators on staff (depending on your state’s laws, and your file), they know the creditor’s tricks. The credit card industry makes literally billions of dollars per year in profit, and they don’t make this by being nice. However nice the customer service representative may seem on the phone, they have one agenda: to get as much money from you as possible. Most typically, for anyone in a bit of debt trouble, the creditor will suggest “Credit Counseling”.
The dirty secret about credit counseling is that “Credit Counseling” was invented by the credit card companies. They want you to feel like they’re helping, but when you enroll in these programs, you’ll repay 100% of your debt plus interest, suffer credit damage, and they’ll often collect a monthly fee on top of it ($49 a month x 48 months, for example is $2,352 in fees, not including interest). They usually won’t tell you this, but they also get a 15% “fair share fee” from the credit card company, so the IRS has revoked the “non-profit” status of many of these companies.
Like plumbing, taxes, or fixing your computer, you can handle debt negotiation yourself, or you can hire a professional. Those willing to educate themselves to learn how to do it right can definitely save some money. That said, for the reasons stated above, often times the settlement amount offered on a debt negotiation you conduct yourself may not be as discounted as what a professional may get, and therefore the service in almost all cases pays for itself. For example, if you get offered $.80 on the dollar, but a professional gets $.42, then it’s actually cheaper even with the cost of service to have a debt negotiation service handle your case.
One dangerous byproduct of staying in debt is not having enough time to invest for retirement. Most people don’t know exactly how much money they’ll need to retire. Do you? The sooner you use debt negotiation to clear your debts, the sooner you can build your investments to ensure you can retire the way you want – instead of living your golden years as a burden on family, with lower standard of living, or working past retirement.
How To Fix My Credit Report
03-01-2010 by admin
A lot of companies out there tout the claim that they can “fix your credit report legally” these days. But what does that actually mean? What does it mean to say they can “fix” your credit report “legally”. The phrase almost sounds like it has a a shady connotation to it, doesn’t it? If you pay them money, they promise to improve your credit score and to “clean up” or “repair” your credit report. Should you take them seriously? Well I’ve got some good news and some good news for you. The truth of the matter is, yes, it is legally possible to improve your credit score and to have negative items removed from your credit report. The other good news is that I will tell you how you can do this by yourself, for free, so that you don’t have to go pay some law firm or some credit counseling company money to do this for you.
It is really very simple, actually. There is no secret, hidden legal process. There is no shady “hacking into the credit files and doctoring them”. There is no creation of a new credit report. All of these methods are illegal by the way.)
All you have to do is take advantage of a well-known law that I’m sure most consumers have heard of. But most consumers have no idea what this well-known law really states. It’s called the Fair Credit Reporting Act.
By law, if a consumer sees something suspect on his or her credit report, he or she has the right to dispute it with the credit reporting agency. The credit reporting agency, by law, has thirty days to investigate the dispute and verify the accuracy of the negative entry on your credit report about which you are disputing. If the agency does not receive a response verifying the disputed item from the creditor within thirty days, then the credit reporting agency, by law is required to delete that negative item from your credit report!
This is a very simple process that every American consumer has a right to engage in. Yet it requires putting in some time and effort, and requires some patience. But if you are persistent at it, you can have a much improved credit score in a matter of a few months. Of course, the creditor could reply back and state that the item has been verified as accurate, in which case the item will remain on your credit report. But sometimes this process can work in your favor. If you have a collection item from a collection agency that has been bought and sold many times over to some other collection agency, it can be a mess to try to track down who actually holds your debt. That alone can take over thirty days. Or the creditor can no longer find your account in their system because your account was closed several years ago. That response alone will cause your disputed item to drop from your credit report. Or the creditor’s contact information is no longer up-to-date and they can no longer be contacted.
Or perhaps the company has gone out of business. So how do you dispute a negative credit item? Simple: Write a letter to the credit reporting agency that has listed the disputed item on your credit report, telling them that you dispute the accuracy of the information contained therein. List the creditor, your name, social security number, and a description of which items are in dispute. For example, if you were ninety days late on a payment to ABC Company in July of 2004, write in your letter that you dispute that specific late payment because you believe it to be inaccurate. You do not need to tell them a more detailed reason why, nor do you need to tell them what you really think it should have said. But you should state in your letter that you are writing to them in accordance with the Fair Credit Reporting Act, and that you expect that they will delete this disputed item within thirty days if it goes unverified by the.
So there you have it! That is how you repair your credit. Be sure to write a separate letter for each disputed item to each of the credit reporting agencies. So if you have ten negative items that you are disputing, and all ten of these show up on the three major credit reporting agencies, then you would have to write thirty separate letters.
How quickly will you see results on your credit report and see an improvement in your credit score? You should give it at least two months. With the time it takes to mail correspondence to the agencies and for them to mail it back to you, plus the thirty days in between, that alone can take five to six weeks. And then, the item to be deleted may not be deleted until the following month, since credit reports are updated monthly.
One more thing: The Fair Credit Reporting Act also gives the credit reporting agencies the right to disregard frivolous disputes. In other words, if you are mailing them dispute notices just for the sake of trying to force the thirty-day rule, they have the right to not take your dispute seriously. But of course, the agencies cannot assume that you are doing so, unless they see you trying to dispute the same negative items on your credit report repeatedly over and over again to see if it will be deleted this time! Keep in mind, though, that the intent behind this law is to protect consumers against errors in their credit report.
Credit Management Or Credit Repair – You Choose
26-12-2009 by admin
The issue of credit management is often overlooked, or conducted in a haphazard or half-hearted way often times resulting in situation that requires credit repair. Why? Because people tend to lose control and focus of their credit accounts and debts, as they get caught up in living and day to day tasks, always thinking that they will get around to paying this bill or contacting that creditor, sound familiar?
An approach of proactive credit management is required, in both business as well as our personal lives, and granted we all want special things, clothes or whatever, but we have to start asking ourselves is that really necessary, or will it end up in the closet like most of the other purchases. This conscious approach to purchases will make the difference of spending on that credit card or not spending on the card and therefore not acquiring any additional credit that becomes payable. The use of a credit card can in fact represent a very sound credit management practice, provided of course the card managed correctly, and that does mean meeting the regular required, which although important, many people are not aware that the credit available on a credit card is often times interest free for a short period. If you can pay off all expenditure on the card within that period then no interest becomes due. It is these sorts of conscious and aware practices that make for a sound credit management program.
In addition to the more conscious approach within one’s spending habits, the active management of existing accounts is vital to ensure that one will not have to engage in any credit repair process. This process involves having up to date account statements at your disposal in a well organized system, thereby being fully aware of your current situation. This will help in avoiding any possible oversights in terms of credit repayments that are due, and will therefore not catch you by surprise or unawares when the creditor contacts you, you know how embarrassing that can be.
Credit management may well seem like a chore or even an arduous task to say the least, however once you have established a sound credit management system as well as the ongoing habit of doing this it will be easier than trying to repair your credit after it all goes South. There are legitimate or unfortunate events within which the individual may well end up in a mess in terms of their credit history and rating, in this instance you should take some time off to establish exactly the position and the severity of the situation. By negotiating with your creditors and remaining true to any commitments that you have made you will be able to address these credit management problems, just do not ignore any credit related issues as that will only add fuel to the fire.