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Free Credit CounselingWhich meant they were not going to set up a payment with me, and not to call them back because it would be harassing. Besides feeling a little slighted that I would not be able to count that client as a success for the day, I remember thinking, what an idiot. Instead of paying a payment now. You would rather get another ding on your credit report and more late fees. I understand that these companies will settle with all your credit companies for a smaller amount and then you only have to pay the counseling service one payment a month and they take care of it all?blah blah. Unless you are in real trouble, like right before bankruptcy, I do not suggest these companies. Lets analyze why. First of all free credit counseling is normally not free. Even if the company does not charge you up front you will pay in a very low credit score. Because it takes a few months to set this program up all your creditors will be reporting 30, 60, 90, 120 days late on your credit, all of them. ![]() This drastically lowers your credit score. As a result even if you never get a loan again, for a house or car. You will pay higher insurance premiums, and it make it difficult if not impossible to rent an apartment or get a job (many employers now run credit reports). Second the free credit counseling will generally promote themselves as a non-profit organization. Non-profit does not mean that you dont pay them anything, they still have operating costs. It simply means the company, as a separate entity, does not make money. But the people who work there get salaries from somewhere. Guess where? Thats right from your pocket. This service is incurring another expense instead of putting that money toward debt. If instead of paying this company you simply spent less money on stuff and put all that extra money toward debt you could be out of debt amazingly fast. Free credit counseling services have their place, but it should be your last resort not your first if you are looking to get out of debt.
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"A man in debt is so far a slave,"
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Copyright©
A Debt Free Life 2007.
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