Can anyone tell me if professional credit counseling is a good idea. Just wondering if there are companies that help without affecting your credit. Need a little help, I am not drowning, losing ground though. Any information will be helpful.

 

Okay......a credit counselor is a free service to you....your ceditors pay the bill. They already have a relationship with most all banks. The service, and the banks agree on a cash price of paying off your debt. Every credit card and account will be frozen. No longer usable. You will not be able to open new accounts for quite some time. If you do.....will negate the deal. Depending on your depth of debt....it may takes years to work your way out. It does reflect poorly on your credit. Many creditors look down upon Counseling services.
If it takes you seven years to pay off......the creditors get to report your bad habit and counseling forr another seven years. Fourteen years your credit looks bad. If bankruptcy was an option......it shows on your credit for seven years. Half the time. I hate to say this.......but we were taught bankruptcy is better. Yes, you would think actually paying your debt would look better on your credit history. Not always.
When I was selling houses, trying to sell houses I only got one credit counseled applicant approved.....and then he never actually funded. I had several bankruptcy people approved, and one funded and moved in, easily at that.
I couldnt find banks who liked dealing with people who went thru credit counseling.......bankruptcy could be worked with after they were released. The counseled people just had that hanging over their head for so long.

Make it this far???????? Since you sound like you arent too bad off yet. I would suggest talking with your creditors. You often can get the same things done, and have the slate look a little cleaner. You'll find banks/ credit card people easy to work with...as long as everyone stays honest and good to the deal. One of the first things they often do is lower you intrest way down low for a period of time.....giving you a chance to pay in the actaul balance.....not silly fees and intrest rates.
Give em a chance......the people who want your money, just might let you keep some of it. Banks.....such an evil empire.
Hope that made sense......I just make all this up anyway.

 

If you're not over your head yet, figure out a way to stop loosing ground.
One way is to watch for credit cards that will give you an interest free period with a balance transfer. If you can put some debt on "hold" with a -0- interest card, then you can work on the rest for a while. Then shift it again. My brother-in-law does this just to take advantage of the -0- interest. Read the agreements first, some are very bad in a fairly short period of time.

Once you are stable, if you have multiple cards, pay off the smallest one first. Then, move to the next one. Some will say the opposite, but I like this method as it reduces the number of bills you have to deal with.

If you are a homeowner, consider a home equity line to consolidate.

If not, carefully consider a consolidation load from a consumer finance outfit if the rates are acceptable.

Sometimes you can do something like that short term, then turn it again with a low interest credit card offer.

And of course, figure out how to pay as you go, cut back, don't do 10,000 rpm clutch sidesteps or drive 100 mph so you can make the parts last as long as possible and not get tickets. Avoid trips altogether.

Do not eat out. See how much food you can buy for $10 sometime.....and none of it will come in a package.

Shop your auto insurance and other insurances also.

Can you work extra hours for more bucks? (some jobs will let you work as long as you like for the same money, you know..)

Ditch anything you can live without that sends you a monthly bill. Cable TV for example.

Good luck.

 

This is why I like asking you guys questions, whether I get good or bad answers, I always get something I can use. I am not in too bad of shape yet, and I am paying off my cards slowly. It's just another one of life's lessons I am learning. Thanks for the info, and will gladly accept more tips!

 

not an expert by any means here. But if you have multiple credit cards, I would dedicate more money to paying off the ones with the highest interest rate on them. Though this was an easy decision for me because the one with the highest interest rate was also the one with the most money on it. So I concentrated the majority of my budget towards paying off that hgher interst rate card. Always paying more than the minimum payment to help knock the principle down.

But like I said I'm no expert here and I didn't have what I would call a huge debt, but it was getting to the point where paying the minimum amount on the one card wasnt getting me really anywhere and I wanted to stamp it out before it got out of control.

 

Credit counseling is generally a bad idea as it can ruin your credit. If you can do it yourself you'll be better off. For help with that, check out the daveramsey.com web site. He is THE "get out of debt guy." He recommends using the debt snowball, which is basically paying off the smallest debt first while making minimums on everything else. Then once that first one is knocked out, take that money and knock out the next biggest one and so on until you have it whipped.

There are a lot of variables in this and a lot has to do with changing your spending habits and getting on a budget. Also, vehicle purchases can be a huge problem. You may not want to hear what he says about that but Dave's right on target. All his recent shows are online if you want to listen to them.

Good luck

Stan