Top 10 Debt Relief Tips - Part 1
March 7th 2009 03:59
Yield - Debt Ahead
With the current economy, lots of people are looking for ways to get out from under huge debt loads. Unfortunately, when you have large numbers of people who owe large numbers of money, combined with the desperation many consumers feel these days, you have the recipe for disaster. But there are some things you can do to help yourself, and most do not cost anything. Here are some things you can do to start working on your debt, and some scams to avoid, since they will just put you farther in the hole than you already are.
1. Scam Alert: Credit Card Settlement
Offering to “cut your credit card bills in half” and telling you they know the secrets that “credit card companies do not want you to hear,” many credit card debt relief companies are primarily looking to grab a quick fee for doing things you could do for yourself for free. If you are considering a debt settlement company (there are some good ones out there), ask lots of questions, get referrals from people who have used them successfully, and ask about fees.
2. Communicate with Your Creditors
This may sound scary to you, but it really is your #1 tool to resolve your debt problems. Communicate openly and honestly with your creditors. If you are having problems staying current because of a layoff, illness, divorce, or other financial crisis, talk to your creditors. In many cases, they can actually help you work out a plan to get caught up without trashing your credit score.
3. Scam Alert: “Quick” Credit Repair
This is the same as a free lunch. In other words, it does not exist. The only way to repair your credit is to establish a history of timely payments. Many of the companies that promise to rehab your credit rating overnight use techniques that may get you a temporary boost, but will not help in the long run. And their fees, again, are not in line with what they bring to the table.
4. Request That Creditors Stop Calling You at Work
The Fair Debt Collection Practices Act actually prohibits creditors from contacting you during working hours if you notify them that your employer prohibits such contact (www.ftc.gov). Make the request and document it with the date, time, and name of the company and representative to whom you made it. It will not keep them from trying to collect the debt, but it can sure save you some embarrassment (and potential negative consequences) at work.
5. Scam Alert: “Instant” Clean Credit History
Many of these schemes operate by hooking you up (for a fee) to someone with a good credit history who is willing to list you on their account as an authorized user. Usually, you do not actually get a card for the account; you just get access by association to their good payment record. Unfortunately, FICO, the company that most credit bureaus and lenders use for credit scores, is in the process of closing this loophole.
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