Tips About American Credit Counseling

You have read all the hype and listened to all the commercials about American credit counseling, haven't you? Almost every one of them has promised to get you out of debt, eliminate your bad credit report and do it all legally. Right?

In addition you have heard many of them proclaim to be non profit. You begin thinking "Oh boy! There going to do it for free". Guess what? Don't you believe it! If you do you're in for a rude awakening.

Many of these companies that make these claims are just barely within the law. They aren't quite cheating you and lying to you, but they are pretty darn close. As you get into the fine print of their claims and contracts, you begin to discover the real truth.

First of all these companies can no more expunge your bad credit than the man in the moon. Much less do it legally. The only legal way to get bad credit off your credit report is to pay what you owe.

But the fact is every late payment, defaulted loans and other bad credit reports, including the record of your debt consolidation stays on your record. Currently all this information will be available to lenders, insurance companies, employers and others, for a period of seven years. What good are they then? You might ask.

The American credit counseling company can take the burden off your shoulders of negotiating with the companies you owe money to. They will set up a mutually agreed on plan with your lenders on consolidating all your payments; into one lump sum. There is also a chance they can get the interest rates lowered on your loans.

In addition they are expert at stopping the collection calls and may even be able to reduce your late and over balance fees. This is all well and good. But guess what, you can do it yourself, of course these companies don't tell you that. Why, because they want to get paid for their service.

Next let's talk about the non profit claims. It is true many of these companies can file for and be granted non profit status by the United States federal government. But everybody that works for those companies has to make a living. So you will be charged a fee for using there service.

You will be surprised to learn many of these companies don’t disclose these hidden fees to you. After you have contracted for their services you will send them your lump sum payment. However, prior to disbursing your money you were paying before; they take their hidden fee off the top.

What this means for you is the amount going to your lenders is less than what you thought you were paying. The possible end result being that it still takes you years to pay off the debt. Plus the fees could end up being more money than the lowered interest rates benefited you.

It is extremely important for you to get every bit of information you can from the American credit counseling companies. They can help you, but they can also make your financial situation even more desperate than it already is.