Click the play button on the video window to the right to see the storyCredit counselors are more than eager to help you out of debt, but some do more harm than good.
Mortgage Originator Dean Wegner says, “People no longer are counting on their bonuses to pay off their debt, or their home equity to pay off their debt, so they're finding themselves with large amounts of debt and nowhere to go.”
It's why many people are turning to credit counseling. But not all players are legitimate.
Wegner says, “Complaints against credit counselors and debt settlement companies are up 400 percent in the last three years.”
So the first step to seeking counseling is knowing what to look for.
If you simply want to work on your
credit report and
FICO score, do it yourself. Don't pay someone to do it for you.
But if you have too much debt and you can't make your minimum payments, consider credit counseling or debt settlement.
The major difference is the amount of money you pay and the amount of time it takes to resolve your debt.
Wegner says, “Typically if you're going into credit counseling, you should be totally resolved within three to five years. The cost is typically about $300.
Debt settlement tends to cost $3,000 to $5,000 up front.
Wegner says debt settlement is the quickest solution, compared to credit counseling and bankruptcy. He says it tends to take three to four months, but it’s also known for having the most scams, so you need to be prepared.
Regardless of which method you choose, Wegner says there are questions you should ask to make sure the company is legitimate:
· How many other people have you helped?
· How long have you been doing this?
· Are you registered with the
Better Business Bureau?
· Are you a member of a
national credit-counseling agency?
· Are you involved with
HUD?
· Are you certified by HUD to talk to me about my credit?
