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Chapter 10: Seeking Professional Help

Navigating the complicated landscape of financial management and credit repair can be overwhelming. Seeking professional assistance through credit counseling can provide you with the necessary insights and guidance. Time is money, as they say. So, it would help if you don’t spend too much of it floundering on your own.

In this chapter, we’ll explore when to consider credit counseling, how to evaluate reputable credit repair companies, and the legal aspects of credit repair to be aware of. 

What is Credit Counseling?

In the previous chapters, we’ve mentioned the option to seek professional help if credit repair is too much for you. This help comes in the form of credit counseling. It is when you go to a certified counselor trained in consumer credit, debt management, and budgeting. 

A credit counselor can help people who are struggling to manage their money to avoid bankruptcy and escape having to live from paycheck to paycheck. In short, they can give you advice and provide you with step-by-step instructions on how to improve your credit health and finances.

When to Consider Credit Counseling

As mentioned, credit counseling is a service that offers personalized financial guidance and education. While some organizations offer this service for free, most of the time, you’ll need to pay the professional who will be assisting you. That’s why it is important to assess if you need this service or not. 

Credit counseling can be beneficial when:

  1. You’re Overwhelmed: Are you struggling to manage your debts and finances? In a nutshell, are you getting deeper in debt and are having trouble making payments? If you answered yes, then you may be getting overwhelmed and can use some assistance. Credit counselors can help you create a budget, manage your payments, and develop a debt repayment plan.
  2. You’re Uncertain: If you’re unsure about your financial decisions or how to improve your credit, credit counselors can also help. Are you finding it difficult to choose between two lenders? Are you unsure about which type of credit to open? They can provide expert advice tailored to your situation.
  3. You Want to Learn: Credit counseling is also about education. Making a mistake especially when it involves money can be costly. If you want to minimize the chances of making such mistakes, you need to arm yourself with the right knowledge to make better financial decisions. 

Evaluating Reputable Credit Repair Companies

Not all credit repair companies can give you the right help. If you’re considering professional credit repair services, here’s how to evaluate reputable companies:

Steps to choosing a credit repair company

  1. Research and Reviews: Look for companies with a solid track record of helping clients improve their credit scores. Read reviews and testimonials from their past clients. You want to find a company that has a good number of positive authentic reviews. Additionally, it is advisable to check that the company you are considering is accredited by reputable organizations like the National Foundation for Credit Counseling. NFCC is the oldest nonprofit financial counseling organization in the US.
  2. Transparency: Reputable companies are transparent about their services, fees, and the process. Stay away from those who are reported to have hidden fees. You don’t want a costly surprise at the end of your credit repair journey. Additionally, avoid companies that make unrealistic promises or guarantees. That’s usually a marketing ploy to trap unsuspecting clients.
  3. No Upfront Fees: Legitimate credit repair companies do not typically charge upfront fees before providing services. Fees are usually charged after work has been performed. Initial consulting fees are often waived if you sign with the company.
  4. Accurate Claims: Beware of companies that claim they can remove all negative items from your credit report. Legitimate companies work within the bounds of the law to challenge inaccurate information. 

Legal Aspects and Credit Repair Scams to Avoid

Understanding the legal aspects of credit repair is crucial to avoid falling victim to scams. Here are some steps you can take:

  1. Understand the Legal Framework: Familiarize yourself with the Credit Repair Organizations Act (CROA). This federal law regulates credit repair services. It prohibits deceptive practices, mandates clear communication, and ensures your right to cancel services. Essentially, knowing the ins and outs of CROA will allow you to tell whether a credit repair service is adhering to legal standards and acting in your best interest.
  2. Avoid Unrealistic Promises: We mentioned this before, but it is worth repeating. If a company promises to remove all negative entries on your credit report, it is a scam. If it guarantees a quick credit score increase, beware.
  3. Protect your Identity: Protect your personal information. Scammers might use your data for fraudulent purposes. The first step is only to release pertinent documents after you’ve signed a contract with your chosen credit repair company. And even then, be vigilant about who gets to access your sensitive data.

Since you’ll be sharing bank and credit card details, it is advisable to closely monitor these accounts. Keep an eye out for any suspicious activity and freeze the account before any significant issues arise.

It is also a good idea to update your online account passwords to ensure that they are strong and unguessable. 

Making Informed Decisions

Professional help can be a valuable resource on your credit repair journey, but it’s essential to make informed decisions:

  • Research Thoroughly: Whether considering credit counseling or credit repair services, research extensively to ensure you only work with reputable and ethical professionals.
  • Ask Questions: You are allowed to ask questions. Don’t be afraid to inquire about their services, processes, and fees. A trustworthy professional will gladly provide the information you need.
  • Trust Your Instincts: Trust your gut, as they say. If something sounds too good to be true or makes you uncomfortable, consider alternative options.

Seeking professional help can offer guidance and support as you work towards credit repair and financial stability. By staying informed, cautious, and proactive, you’ll be better equipped to navigate the world of credit and make choices that align with your financial goals.

Next: In Chapter 11: Monitoring and Maintaining Your Credit, we’ll delve into the critical phase of monitoring and maintaining your credit. We’ll discuss the importance of regularly reviewing your credit reports, using credit monitoring services, and the significance of continuing positive credit practices.