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by misuba on July 22nd, 2003

misuba

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Numerous credit-counseling agencies, all of them claiming non-profit status, want my business enough to advertise on late night TV, and even send me spam. Are these places sketchy? How should I select one?

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  • by Yoyo Head on March 8th, 2004

    Yoyo Head

    My two cents:

    I have serious reservations about these places. They try to get you lower interest rates and reduced balances, but the primary thing that keeps you in debt is your own habits. A change in yourself is the only way to be out of debt long term. Their efforts might not get you out of debt as much as just keep you in debt longer, by reducing the required minimum payments and extending the terms of the loans.

    Also, under each entry on your credit report there is a line that reads either: "Paying as agreed" or "Not paying as agreed." If these agencies get your payments reduced, does their account show on your credit report as "Not paying as agreed"? If that's true, then using their service actually damages your credit.
    I avoid debt financing whenever possible. It makes things cost more than they are supposed to cost (due to interest) and makes me a slave to a bank. My advice would be to make a plan that will get you out of debt, and then work that plan and stay away from debt afterward.
    Best of luck with it.

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