Consumer credit counseling services are educational programs set up to help people who have made poor credit decisions learn about their credit, and how to manage it. However, while these services do offer distinct benefits for people who really need them, there are also a number of potential disadvantages to using credit counseling services.
Negative Cedit Impact
Typically those who seek out credit counseling services already have credit scores that have been significantly damaged. But joining a credit counseling service may negatively impact your credit even further. Since the counseling services act as a buffer between the debtor and the creditors, bringing an extra player into your credit problems shows that you couldn't pay off the debt yourself, which makes you a bigger credit risk. However, if your credit is already severely damaged, then the impact of the counselor may not be enough to outweigh the benefits.
Cost
While some credit counseling services advertise themselves as being free of cost, legalmatch.com says that might not always be true. Since you make a single payment to your credit counselor, that payment may include items such as "Monthly Upkeep Fee" or "Monthly Donation." It's important that if you're going to use a credit counseling service that you make sure you know exactly what you're paying, to whom, and for what. Otherwise you might have all kinds of fees that slip under your radar.
Freedom
When you use consumer credit counseling services, you're giving up your own freedom to allow them to act as your representative. A credit counselor essentially bargains with companies you owe debts to in order to lower your monthly payment to a more reasonable rate. This is something that you yourself can do without help, but most people don't know that, or don't believe that a company will negotiate with them. If you allow a counselor to do it for you, you're placing your trust and your finances in their hands.
0 comments:
Post a Comment