When Should You Use a Credit Card Settlement Agency?

When Should You Use a Credit Card Settlement Agency?

by Linda Moreland

Some people like to deal with their credit card debt all by themselves. They feel this is a personal, confidential matter and they have the time and possess the patience to research credit repair products on and offline. They have the determination to get their credit reports from the 3 main credit bureaus and go over them with a fine tooth comb. These type of people usually do very well in improving their credit scores, as long as they have chosen a reputatable credit repair product. However, you need to realize that the reports the credit bureau gives you and the ones they give the car lot around the corner when you apply for a car loan, are NOT the same reports. Next time you're sitting in the show room waiting for your approval, ask the Finance Manager if there was any problem with your credit report. Go one step further and ask him if you could see the report, possibly there are errors on it. He'll very quickly come up with a reason not to share their report with you. Why? Because it's a different report!

Some people prefer to use a credit card debt settlement agency because they are not comfortable in dealing with credit card debt settlement by themselves. They may not have the time that is required to do the necessary research and evaluate the various options that are available. Others are looking for professional advice and hence they contact a credit card debt settlement agency in an attempt to get qualified assistance. However, keep in mind most credit card counselors will want you to immediately cancel all your cards, then they will help you make arrangements to pay them in full. If you have a favorite card you prefer to keep, this can become an unsettling issue.

If you decide to try an agency, make sure you select a reputable company, one which has verifiable credentials or a agency that you personally know has a good reputation. Perhaps a friend has been through this process recently and they have recommended an agency to you. Do not believe the ads that promise to erase all your debt overnight. There are ways to eliminate certain bad entries on your credit report, but you will not find these methods employed by the credit card debt settlement agencies. This involves specific filings that are usually done by an attorney and this service is usually expensive.

Sometimes you will find classified ads that promise quick credit repair and they instruct you to call a telephone number that's a premium line. Please beware of this tactic, or you might end up paying heavy phone bills that would just add to your debt. Don't contact an agency that you've never heard of just because they promise the lowest fees in town. These are again the credit card debt settlement agencies you should avoid.

I have a good friend that owns a credit card settlement agency. He told me his main goal was to get the credit card companies as much of "their" money as possible, even if it meant smaller payments over a longer period of time. That doesn't really sound like he's working for YOU, does it.

I can't say all the agencies are alike. However, I do know, from helping my clients, if you aren't prepared and you don't know what you are doing, as soon as you request your credit reports from the credit bureaus, your phone will start ringing off the wall with collection agencies demanding you pay off debts from prior years. You need to be prepared and know what to do when this happens, being armed with proper techniques for handling this situation is imperative.

So, before you stir up the hornets nest, in my opinion, you need to be prepared. Have your speech ready when they call. Know what your rights are. Research the filings that come with your credit repair kit so you'll know how to get the tax liens and repossessions OFF your credit report. Have everything available before you start the process. Understand what you are doing and why.

You don't have to be a victim of bad credit. You can improve your credit score, you just have to know how to do it. For a long time the credit bureaus have bullied the public into thinking they couldn't win, all the burden of proof has been on the public, and actually it still is. But with appropriate and up-to-date information, you can arm yourself with the knowledge you need to improve your credit while at the same time protecting your sanity. There is information available to help you, step-by-step instructions to help you improve your credit score, you just have to use it.