Credit Counseling – Counseling For Your Credits

The best credit counseling can help people who are behind on their debts get back on their feet. Generally people tend to fall prey on credit cards. They shop all throughout the day using their credit card and when it comes to paying the hefty bills, they turn back. This leads to bad credit problem. Well, credit-counseling is the only way for them and by which they can solve their financial problems.

Counseling services negotiate lower payments with credit-card companies and other lenders. They then make an electronic cash transfer or a check sent to them by the consumer each month. Then there is a payment system known as, “fair share” which has encouraged the credit counseling services. You should always go for a reputed counseling service else you will be ruined by the fraudulent companies which are available nowadays. They take money from you and at the end of the day; you come to know that you are ruined without any progress.

Credit Card Application – Choose your card wisely

When it comes to choose your card, it is always better to compare different cards and then make a decision that suits you the best. Credit card application can be filled online with just a click of a mouse. If you are looking for a card that has a good reward scheme, low interest rates on purchases, or any other exciting schemes, then it will all be there at your finger tips. Once you are done with your application, they will mail out all the required documents where you need to sign and return to them. But be specific in choosing them so that you don’t need to go in for credit counseling with bad credits.

Business Credit Card – Credit card for businessman

Then there are many other cards like business credit card which is usually issued to corporate executives or business owners. For this card, you need to talk to a Business Card Specialist who will take into account some of your personal information and your business details. In some case, they do not even ask anything about the businesses…etc.

Whatever card you carry, just be sure that you carry the right one that suits you and do not overspend. Have control on your spending and always follow your credit limit and not beyond that.

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What Are the HUD Credit Counseling Requirements?

Homeowners with high “back end” debt (credit card debt, car loan debt must participate in HUD- approved credit counseling if they want to receive the benefits of certain mortgage modifications and refinance plans offered by the government. In order to participate in loan modifications programs, you must be willing to participate in certain events and classes.

High Debt

If you have high back end debt such as a mortgage, credit card and other forms of debt, you must undergo mandatory credit counseling. However, under the plan, borrowers with back end debt exceeding 55% of one’s income may also be eligible for a loan modification if they participate in a HUD approved counseling program. Credit counseling agencies must certify themselves as HUD counselors in order to offer counseling under the Mortgage Modification Plan.

Eligibility

When and if a credit counselor determines that a homeowner doesn’t qualify for a modification, the counseling agency must discuss all options to the borrower outside of the modification plan. If it is possible for the homeowner to work out a deal and stay in their home, the counselor should advise the owner of all of their options to keep them out of foreclosure.

Mandatory Meetings

Borrowers that are required to participate in mandatory credit counseling must meet with a counselor from a HUD approved agency. The program requires that the borrower attend two sessions with the counselor. HUD counseling can be paid for by certain grants and funds if the participant falls within the 55% back end debt ratio. TARP funds are not allowed to be used to pay for housing counseling since the modification program is supported by TARP funds.

If you find that you have a high debt to income ratio and want to participate in a loan modification, you may be required to participate in HUD credit counseling services.

There are numerous programs available to those struggling to make their mortgages and survive while unemployed. Not only is credit counseling mandatory, it is helpful as well. You will learn help tips and be able to manage your finances better. The counseling is mandatory for participants in the program and it certainly worth looking in to.

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Credit Counseling – An Effective Debt Relief Option

Millions of Americans are now facing debt problems. There are several debt relief options available, such as credit counseling, debt negotiation/debt settlement, debt relief loan, bankruptcy and several other debt relief options. Before going to consider any option, it is important to thoroughly understand each option and then choose the option that is right for you.

Credit counseling:

Credit counseling is one of debt relief options for consumers who are experiencing financial problems and unable do their minimum monthly payments. Most firms offer these services that are particularly a means to make one payment directly to the counseling agency, which then distributes the money to the creditors.

Usually a credit counseling agency lowers your monthly payments by giving concessions on the interest rate from creditors or lenders. Credit advises can solve financial problems to a great extent. You should understand the fact that even you seek counseling, you still pay 100% of your debts, but with less monthly payments. Usually, these counseling program takes about five years. Undergoing counseling doesn’t not affect your credit report, but enrolling in this debt management may appear on your credit report. Most lenders consider credit counseling services like filing for chapter 13 bankruptcy or using a third party to reorganize the debts.

A good credit counselor can provide a great deal of assistance. But you need to do your work before you can end up with a credit counseling agency that will take advantage of you.

Who benefit from credit counseling?

• People who cannot make minimum monthly payments on a timely basis can benefit greatly from credit counseling agencies.

• Credit counselors help with unsecured debts like credit card debts, personal loans or bills for medical care.

• People who have difficulty with secured debts like car loans or home mortgages or insurance bills or payments due for utility services. But credit counselors consider your entire debt load while generating a budget and repayment plan.

• People who are at risk of foreclosure or repossession, they can assist or advise you on how to contact the lenders and get additional time for you to catch up on your late payments.

• If the credit counseling agency negotiates your debts, then make a budget plan that help you stay on top of the obligations. They provide you appropriate debt management services that will benefit in debt relief.

• In case your economic position is beyond this kind of debt management services, then you need to take help of bankruptcy.

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Consumer Credit Counseling Services – Many Are Scammed, Beware!

Credit counseling agencies are nonprofit organizations that intend to help debtors to resolve their debt issues by providing counseling and education on consumer credit, money, debt management, and budgeting. And, most of time, debtors are advised to enroll into a debt management plan so that they can follow the plan to work out of debt. Debt management plan proposed by reputable and legitimate credit counseling agencies do serve the purpose.

But, beware that many very attractive debt management plans offered by companies who called themselves credit counseling organizations are actually scams who are trying to cheat your money and worsen your debt situation. So, how could you avoid yourself from falling into these traps? Let go through 2 scenarios that you will potentially faced when approaching a credit counseling service which may run by scams.

Scenario 1: Propose A Debt Solution Without Analysis Your Financial Situation

When you consult a credit counseling agency, the counselor suppose to analyze your financial situation by understanding all your debts, expenses and financial affordability before he work out plan that best fit your financial situation. If you found that your counselor is not paying attention when you explain your financial difficulties and he did not ask you the questions to get further understanding on your debt problem. What he is trying to do is propose their best debt management plan to you with a number of guarantees that your debt issue will surely be resolved if you enroll into the plan.

Don’t ever trust him else you will regret once you sign up and hand over your money. And, after that found out the propose debt management plan does not fit your financial situation. Avoid yourself from credit counseling agencies that propose to your one debt management plan that fit all financial situations. They just want to earn your money without really help in your debt problem.

Approach other credit counseling agencies and get one that really care about your debt problem, educate you on the cause of your debt issue, tell you what are your options based on your current financial status and guide you on the best debt solution with or without a debt management plan.

Scenario 2: Charge You An Upfront Cost Or The Fee Is High

The rule of thumb, credit counseling services are free of charge but most debt management plan (DMP) offered by credit counseling services have certain fee. The fee of DMP should be deducted directly from your monthly payment and it should not be too high; the reasonable fee should be plus minus $50. If you are asked to pay an upfront cost during sign up with the debt management plan, then it better to reject the plan and approach other credit counseling agency.

Beside that, before you sign on the agreement for the propose debt management plan, remember to check in details for any other hidden costs. There are unethical companies hide other costs to make the plan very attractive. These hidden costs will be written in the agreement. Unfortunately, most people won’t read the agreement in details when they sign on the dotted line. If you are unclear or need more time to read through the terms and conditions stated in debt management agreement, request to bring the agreement back to home for reading and sign back to the company if the terms meet your requirements.

Summary

Reputable and Legitimate credit counseling agencies are organization that help debtors to reduce and resolve their debt problem through counseling & education. They may recommend you to enroll into a debt management plan if your case really needs one. Whereas, credit counseling agencies run by scams care more on their profits than your debt problem. You should smart enough to differential them and avoid yourself from these scams.

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