Many Consumer Credit Counseling Companies tout their non-profit status. Many consumers confuse “non-profit” with “no charge for services”, or charity. Non-profit Consumer Credit Counseling Companies may still make substantial amounts of money. The way Credit Counseling works is that you typically meet with a Credit Counselor who analyzes your unsecured debts, other obligations, and your monthly income. A credit counselor then formulates a monthly budget and presents a plan that includes lowering of some credit card interest rates and sometimes, the monthly payment typically around 11% interest. The Credit Counseling Company then contacts all your unsecured debt Creditors and requests that the consumer be permitted to repay the debt at a lower interest rate. During the program a single monthly payment is sent to the Credit Counseling company and they in turn make payments directly to all your creditors for the next 48 - 72 months. Read the rest of this entry »
Aug
8
Debt settlement and debt consolidation are two great ways of reducing your debt but each have their own benefits and detriments which you should consider before deciding which option to persue. Debt settlement eliminates part of your debts, while debt consolidation reduces the interest rates of your debts. While debt consolidation may have the least amount of impact on your credit score, there are cases when debt settlement is a better choice. Read the rest of this entry »