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Your Credit Report Personal Debt Consolidation |
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Friday, 18 May 2007 |
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How does counseling affect your credit report in personal debt consolidation? The number one question that could consumers inquire about credit counseling for personal debt consolidation is, “How does counseling affect my credit report?” You should understand that if you pay every bill that you have on time, your credit may not be as good as you originally thought. A study conducted by Experian Consumer Direct found that, in the United States over 16% use at least 50% of all of their available credit.
The overall national average is 678. The national average credit score for individuals using credit cards 50% of the time is 631. In reality, your credit score may actually be hurting if you have maxed out all of your credit cards. Your FICO score is not reflected upon when you order the end credit counseling. Most creditors will actually delete late payments immediately before you enter into one of these credit-counseling programs for personal debt consolidation. They generally do it after you have made three payments on time and have shown some consistency on paying your bill. A lot of counseling agencies have been frowned upon in recent years for charging ridiculous fees, and taking advantage of their nonprofit status by contributing money to affiliates. A lot of counseling agencies have been accused of misdirecting consumers on their programs for personal debt consolidation as well.In 2003 the Federal Trade Commission actually sued one of the biggest debt counseling agencies for these reasons, and in 2004 United States Senate held hearings on counseling agencies that abuse the system. The United States Senate found that agencies did take advantage of both their tax-exempt status and their consumer trust. The government has kept a close eye on these agencies every sense then. Don't let this scare you off, this does not mean that all counseling agencies are bad. There are hundreds that have been doing work quietly or years on small budgets. Many counseling agencies have affected thousands of people's lives in a positive way. A solid counseling agency will allow you to avoid bankruptcy and further financial problems. Make sure you take your time and carefully pick a counseling service best for you. Once you have made the decision to initiate a credit counseling service, and are motivated to stick to the plan, a lot of good things can happen. With a 3-6 year plan that you follow, and some self-discipline, you will be out of debt in no time. |
