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    • Credit Counseling Agencies: Good Or Bad?

    There are many different opinions from financial experts and consumers regarding the use of Credit Counseling Agencies in order to help get out of debt. Some will tell you it’s the best thing you can do for yourself when you’ve gotten into uncontrolled debt, while others will warn you to stay as far away from a credit counseling agency as possible. How can you make the decision whether or not to work with an agency or not?

    Research

    If you are considering signing with a credit counseling agency to help manage your debt, you need to research. Don’t join the first company you find without comparing their services to other companies, or checking their reputation. Here are a few questions you should ask of any credit counseling agency you are considering working with:

    Is the Agency a nonprofit organization?
    How is the monthly payment determined?
    How much money will each creditor receive each month, and on what date will they receive payment?
    What will your interest rates on your existing accounts be once enrolled in the Credit Counseling Agency’s program?
    How much money does the Agency receive each month out of your monthly payment, and what is it used for?
    What happens if you decide you want to cancel?

    These are important questions you should ask of any Credit Counseling Agency before making a decision. If your monthly payment is going to be 300, and 100 of that goes to the Agency for their services- are you really saving money by working with this company? Couldn’t you send that 100 to one of your creditors on your own, and help reduce the amount you owe? If the amount is minimal, say 20 on a 300 monthly payment, it may be worth working with the Agency if they are able to reduce your interest rates on your accounts so that more of the payments are going towards the debt rather than new finance charges.

    Possible Self Negotiations

    What most people don’t consider is the fact that they can call each of their creditors on their own, and ask to work out a new payment arrangement. If you explain you are having difficulty and are considering going to a credit counseling program or bankruptcy, there is a possibility that they might work with you and lower the interest rate that you’re paying, the minimum monthly payment, or both! In fact, you may be able to negotiate better terms than a credit counseling agency since creditors basically have a process that they follow when working with the agencies, and working with an individual may afford a little more flexibility and work out in your favor.

    Better Business Bureau

    When you’ve just about decided that you are ready to work with a specific credit counseling agency, your final step before enrolling should be to check out the company’s reputation with the Better Business Bureau. This is where you can find out about complaints made about the company by consumers like yourself, and decide whether or not you think they are an honest company worthy of your business.

    After Enrolling with a Credit Counseling Agency

    Your work doesn’t stop after you’ve enrolled with a credit counseling agency. You will want to review your account statements each and every month, to make sure that they are receiving payments from your agency on your behalf. There have been horror stories of individuals who enroll in credit counseling agencies, send their payments in month after month, and the agency never actually submits the payments to your creditors, or they do so late all the time which results in late fees and eventual termination from the program!

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    Bad Credit Credit Cards Build Credit With A Major

    Bad Credit Credit Cards Build Credit With A Major Credit Card

    For the millions of consumers with bad credit and no credit, getting approved for a major credit card takes a lot of effort. Unfortunately, establishing credit is as equally challenging as re-establishing credit. Creditors consider both types of people as risky applicants. Thus, they are less eager to extend a line of credit. However, there are ways to get around this problem. Bad credit credit cards are intended to make it easier for some to obtain credit.

    The Importance of Establishing a Good Credit History

    Even with poor credit, you will be able to finance many purchases such as a home or vehicle. However, good credit has certain advantages. Those with a high credit score receive prime rates on home loans and auto loans.

    For some, low rates may not be a huge deal. Yet, low interest rates on loans can potentially save you hundreds each month. Moreover, having good credit unlocks the door to better financing alternatives.

    Similarities Between Having No Credit and Bad Credit

    Unfair as it may be, some lenders group those with no credit and individuals with poor credit into the same category. This makes it harder for young people and those trying to establish credit. Individuals with poor credit made certain mistakes that justify a lender’s reluctance. On the other hand, those with no credit history have zero credit mistakes. So, why do some lenders deny credit to those with no credit history?

    In a nutshell, before granting a credit card or loan, lenders will review credit reports to examine past relationships with other creditors. Its a way to determine an applicant’s likelihood of repaying funds. If you have no credit history, lenders become uncertain. Instead of taking a gamble, they rather deny an application.

    Getting Approved for a Bad Credit Credit Card

    Getting approved for a bad credit credit card is easy. The tricky part is finding a lender that specializes in this sort of credit. Use the internet to your advantage. Many bad credit credit card lenders offer online applications and instant approvals. If you are hoping to build a good credit history, this is one of the easiest approaches.

    There are two types of bad credit credit cards. If you are approved for an unsecured card, you may receive an initial low credit limit. However, as you maintain regular payments, the creditor may gradually increase the spending limit. With a secured credit card, applicants must open a saving account with the lender. In the event that you decide to stop making payments, this account serves as collateral.

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