Title:
Credit Card Debt Negotiators Can Ruin Your Credit Score
Word Count:
548
Summary:
Credit card debt negotiators claim that they can help you pay less than
you owe. Read the truth about credit debt negotiation scams. Protect your
credit history.
Keywords:
There are different reasons why people get into debt. Just all of a
sudden you realize that you just can not make your payments. Bills and
credit card statements drive you crazy and it seems that you
Article Body:
There are different reasons why people get into debt. Just all of a
sudden you realize that you just can not make your payments. Bills and
credit card statements drive you crazy and it seems that you will never
get out of this trap yourself. This is when debt negotiators step in.
If you get online you will find a dozen of credit negotiation companies.
They promise to help you with your unsecured debts through negotiating
with banks.
Some of them claim to be nonprofit organizations that simply work to help
those in need. They tell you that they will be able to reduce your debt
by 10-50%. All you need to do is to open a credit card debt negotiation
account (for a small fee, of course). Then they might suggest you make
only partial payments or stop making your payments to the bank and give
money to them instead. Because the process of debt negotiation is not a
very easy one you will be asked to wait for about six months. They
promise that all the negative information will be removed from your
credit report afterwards. And, of course, credit negotiation will not
have a negative affect on your credit history.
The truth is that those debt negotiation 'experts' are one big scam.
First of all, even if the company presents itself as a non profit
organization it does not mean that there actions are legitimate. If you
follow their advice and stop making payments you will get even higher
interest rates and late fees. Your creditors might not like the idea of
the debtor making only partial payments. Thus your debt might double or
even triple.
The fees for those 'services' will also drain your purse. They usually
include a fee for opening an account, a monthly service fee and a final
fee. The amount of money you will pay as the final fee usually depends on
the percentage of the sum you are to 'save'. Of course, some of their
clients understand the trick before they get to the 'final' stage but the
scammers still make a decent income.
As for the promise to remove all negative information from your credit
history you should remember that there is no legal way to do it! The bank
has to report everything to all the three credit bureaus. All the
information stays on your credit report for seven years and bankruptcy
remains for seven. The only way to remove any information from your
credit report is to prove that it is incorrect.
Most of the time credit negotiation firms present there service as an
alternative to bankruptcy. However, bankruptcy is a legal way to manage
your financial situation. Debt negotiation will have no effect - if you
are lucky. If you are not – you will be even more in debt than you have
been before. Do not confuse credit negotiation services with credit
counseling and debt consolidation planning. The latter simply give you
advice and help you to plan your budget.
Credit card
deals can be a great financial tool if used wisely. But if you can
not make your payments do not fall into the credit debt negotiator's
trap. Do not pay for getting your credit history ruined.