Home > Credit Repair >
Credit Help > Credit Help Beware Of Too Many Fees!
Credit Help Beware Of Too Many Fees! |
|
Credit help or debt reduction companies are agencies that work towards lowering the interest rate of your debt, so that you get a better deal. It also helps you to get out of your debt quicker. When you sign up with a credit counseling or a debt reduction agency for credit help, creditors generally grant a lower interest rate in the last effort to collect their money owed; they would rather collect most of their money than none at all. This can be a substitute for the people who wish to file for bankruptcy. A credit help agency typically requires a startup fee, or a program deposit. Be careful if the agency wants to charge you a deposit equal to the first month's payment. They'll always tell you that you'll get this deposit back after completing the program. No wonder! They know it very well that 75% of people that join DO NOT finish! Also, many will only give you this deposit back if you follow the agreed terms. That means if you are late on one payment, don't pay the full amount of your monthly dues, or even pay more than your monthly dues, they count as not sticking to the agreed upon terms and you lose your deposit. Be careful of credit help agencies charging excessive startup fees, too. More than $200 is too much. After you sign the credit help agencies contract and join their program, they will get you lower interest rates and lower payments for the majority of your creditors, however, there may be some that will refuse to participate in the program and will insist that your payment and terms remain the same. The agency will then collect from you the total owed to the creditors every month, plus a monthly fee that they charge. Again, be wary of agencies that charge more than $30 for this fee. In fact, for most states you are not required to pay this fee at all. The credit help agencies will never tell you this fee is optional, though, you have to ask. Also keep in mind that while you are accumulating money to pay off these debts you still accumulate late fees and interest charges, which increases your balance. The credit help agency disburses the money it receives as monthly payment from you to the creditors. Be sure that, if you send extra money along with your payment that the agency disburses this money to the creditor with the highest interest rate. This will ensure that you save most money and end the program faster. After you pay off one creditor, the agency should keep your monthly payment the same and apply this now freed money to the creditor with the next highest interest rate. One by one your creditors will be paid off and you will eventually become debt free. The credit help and debt management agencies not only make money from your startup and monthly program fees but they also receive a kickback from the creditors. This is called Fair Share. Creditors will typically allow the agency to keep between 3-15% of your payment as a collection fee! As you can imagine, this can add up very quickly for the credit counselor! This however, is standard industry practice and is perfectly legal. Not only should they be collecting your money to get you out of debt, they should be committed to keeping you out of debt. A credit help agency that has repeat customers is not a good agency! You may be aware of telemarketers that try to get you to sign up on their program. These especially are the agencies that are out to get your money. A good rule of thumb is that if they can't see you in person, they aren't worth talking to. Plenty of reputed credit help agencies are out there for those people that truly need their services. Just be alert and make sure you go through all the fine print of their contracts! |
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
|
|
|
|
| ------------------------ |
|---|
|
| ------------------------ |
|---|
Custom Search
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
Consumer Alerts | About | Bookmark Us | Contact | Espanol | Privacy Statement | Copyright | Terms & Conditions | Financial Widgets | SiteMap
Copyright © 2006 Credit Loan, LLC. 235 APOLLO BEACH BLVD, STE 218 Apollo Beach, Florida 33572 All rights reserved.
Disclaimer: The content provided on CreditLoan.com is for informational purposes only; do not make any financial decisions based on its content. Financial decisions are personal, based on an individual's situation. Consult with a financial professional before making any financial decisions. CreditLoan.com is not liable for your financial actions.
