Credit Repair Companies - Too Good To Be Real?

[Steven]

Having spent many years rebuilding my credit but still struggling with debt, naturally the temptation to buy into all the ads is enticing. Lower payments, reduce interest etc etc... Nothing comes without a price. What are the pitfalls of these type of companies and can they really deliver on the promise???

[Anonymous]

I have attempted to describe some of the dubious tactics associated with credit repair in the linked article. I also offer some tips on finding a good credit counseling service and getting a debt consolidation loan.

Some of the biggest pitfalls of debt consolidation loans are the exchange of faster payoff for a lower monthly payment, or balloon payments which actually cause the loan balance to increase each time the loan is refinanced.

[Steven]

Aaron thanks a million!!!!!

[Steven]

My apologies for continuing to bother you but....

I've been lead to believe that once you engage in a debt servicing program this is indicated on your credit report negatively? Is that true?

[kingston]

Most creditors view it negatively I know in the mortgage industry when we qualify borrowers it is viewed as bankruptcy which basically qualifies you with higher points and fees

In my opinion these consumer credit agencies and filing bankruptcy is the same difference

Then again I am not a lawyer just a mortgage professional

[tiny]

I have seen some debt consolidation companies that negotiate with creditors in such a way so that they report the account as "Paid As Agreed" or "Paid in Full". I don't think that it will impart any negative mark in credit history. It's far better than bankruptcy, since the borrower has tried and worked out some plans to repay the debt. Need more info....

[GreatGadsby]

I have seen some debt consolidation companies that negotiate with creditors in such a way so that they report the account as "Paid As Agreed" or "Paid in Full". I don't think that it will impart any negative mark in credit history. It's far better than bankruptcy, since the borrower has tried and worked out some plans to repay the debt. Need more info....

if it's a collection that gets marked as paid, it is still bad. a paid collection looks the same as an unpaid collection to credit lenders. it's the fact that something went to collections in the first place, not wether you paid it off later.