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Credit counselors

Posted by Deb_PA (My Page) on
Sat, May 8, 04 at 10:38

I posted this on the Financial site but most of the posts are 2 weeks old. If anyone here can help it would be appreciated.
My daughter needs a credit counselor company. I did a search and come up with thousands. How do I know which are legitimate and which are scam artists? Has anyone used one they would recommend?

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RE: Credit counselors

Maybe you should take a step back and provide some information on what type of financial trouble your daughter is facing. Credit counselors often are not in a position to do any more for you to alleviate debt than you can do yourself with a few letters and/or phone calls to creditors, and as you have rightly pointed out, some are even scam artists.

Making use of a credit counselor often puts a black mark on your credit report that is second only to bankruptcy, and often it's practically a toss-up as to whether the credit counselor might actually be worse. Lenders who see on your report that you've used a credit counselor know that you still have the bankruptcy card up your sleeve to use if you wish, and they also know that statistically a high percentage of people who use credit counselors ultimately file bankruptcy. As a result, you put yourself in a position where you are about the worst credit risk around.

If your daughter is determined to use a credit counselor anyway, what I'd look for is an agency that's non-profit. Many "credit counselors" are nothing more than fronts for loan companies who are out to peddle another high-interest-rate "consolidation loan" on top of all the other loans the person has, and the last thing a heavily indebted person needs is additional debt.

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