Getting Credit Consolidation Help
Editor’s Note: Some of the information in this article is inaccurate. Much of the information in the article about non-profit credit counseling agencies is misleading or inaccurate. Still, I have left this article intact as it is a from a guest writer. However, you may wish to take information in this article with a grain of salt.
Having a lot of debt can get complicated to manage, especially when it is spread out over multiple credit cards and loans. If you have a variety of credit cards at different interest rates with different balances, consolidating debt can also be a way to lower your interest rate and reduce the total monthly payment you have to make.
Finding out how you can consolidate credit and debt can also be a daunting task. But it doesn’t have to be. Much of the steps of consolidating your credit and debt you can do yourself. To get help with the consolidation process, there are also many non-profits and other organizations that are willing to help.
When you are looking for consolidate credit debt help, one thing to look out for are agencies that charge you a fee. Find out how much the fee is, because sometimes it’s a percentage of your monthly payment. There are some non-profit credit consolidation agencies that do not charge the borrower, but get paid by the credit card companies. The problem with using this type of company is that they are more likely to convince you to pay off your credit card debt, instead of say, filing for bankruptcy if your circumstances warrant it. They are encouraging you to make minimum payments to credit card companies.
But be aware that working with such an agency also appears on your credit report, and will negatively impact your credit history. These types of arrangements are treated like any other delinquency. You are considered to be late on payments or to need some assistance with payment, and it’s not the same thing as making your regularly scheduled minimum monthly payments on time.
So when you’re trying to devise a program for debt bill consolidation, an agency might be able to help you because they will contact your credit card companies and negotiate lower minimum monthly payments on a temporary basis. Some agencies will also negotiate a lower balance on your total amount owed, but frequently the unpaid balances considered a charge off by the credit card company, and is a black mark on your credit report.
Instead of finding companies who will do the work for you, a lot of the steps can be done by the borrower on their own. For example if you can call your credit card companies and explain to them your difficulty in paying, and try to negotiate either a lower total debt balance, reduction of fees and costs, or a lower monthly payment for a certain amount of time until you get back on your feet. Creditors today are well aware of the financial difficulties that many of their customers are going through. They are for the most part willing to work with you to arrange repayment that you can afford. Before going to a credit consolidation company, see how far you can get on your own, and save the expense of any fees and costs you might spend.
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