Do Not Pay For Getting Your Credit History Ruined

Category: Finance, Credit.

There are different reasons why people get into debt.

Bills and credit card statements drive you crazy and it seems that you will never get out of this trap yourself. Just all of a sudden you realize that you just can not make your payments. This is when debt negotiators step in. They promise to help you with your unsecured debts through negotiating with banks. If you get online you will find a dozen of credit negotiation companies. Some of them claim to be nonprofit organizations that simply work to help those in need.

All you need to do is to open a credit card debt negotiation account( for a small fee, of course) . They tell you that they will be able to reduce your debt by 10- 50% . Then they might suggest you make only partial payments or stop making your payments to the bank and give money to them instead. They promise that all the negative information will be removed from your credit report afterwards. Because the process of debt negotiation is not a very easy one you will be asked to wait for about six months. And, credit negotiation will, of course not have a negative affect on your credit history.

First of all, even if the company presents itself as a non profit organization it does not mean that there actions are legitimate. The truth is that those debt negotiation' experts' are one big scam. If you follow their advice and stop making payments you will get even higher interest rates and late fees. Thus your debt might double or even triple. Your creditors might not like the idea of the debtor making only partial payments. The fees for those'services' will also drain your purse.

The amount of money you will pay as the final fee usually depends on the percentage of the sum you are to'save' . They usually include a fee for opening an account, a monthly service fee and a final fee. Of course, some of their clients understand the trick before they get to the' final'stage but the scammers still make a decent income. The bank has to report everything to all the three credit bureaus. As for the promise to remove all negative information from your credit history you should remember that there is no legal way to do it! All the information stays on your credit report for seven years and bankruptcy remains for seven.

Most of the time credit negotiation firms present there service as an alternative to bankruptcy. The only way to remove any information from your credit report is to prove that it is incorrect. However, bankruptcy is a legal way to manage your financial situation. If you are not- you will be even more in debt than you have been before. Debt negotiation will have no effect- if you are lucky. Do not confuse credit negotiation services with credit counseling and debt consolidation planning.

Credit card deals can be a great financial tool if used wisely. The latter simply give you advice and help you to plan your budget. But if you can not make your payments do not fall into the credit debt negotiator's trap. Do not pay for getting your credit history ruined.