Consumer credit card debt is at an all-time high. Add to that trillions of dollars in mortgages, personal lines of credit, home equity lines of credit, and student and personal loans on top of that.
People are tapped out and struggling to get your debt under control can feel overwhelming.
If you’re considering getting help from a credit or debt relief company, the Better Business Bureau wants you to be careful which one you choose. Some companies could leave you worse off than when you started.
The BBB released a study concluding that some unscrupulous debt relief and credit repair companies fail to deliver. They rely on consumers' confusion and urgency around unpaid debts and charge thousands of dollars in fees for services you can do yourself.
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The study shows that services like debt negotiation, the creation of payment plans and disputing inaccurate credit report information are all things you can do yourself by calling your creditors and the credit bureaus.
“Any company saying that they're guaranteeing that they're going to fix all of your debts, be very wary of that,” said Claire Rosenzweig, president and CEO of the Better Business Bureau Metropolitan New York.
“You really need to understand that there's so much you can do on your own first. And then if you should decide to check out a company, do your homework, understand everything about the fees, what they're going to do, how they're going to do it.”
Remember it can take years to get out of debt and repair your credit. The BBB has some tips for resolving debt or credit problems:
Know your rights when it comes to debt collection – there are laws and regulations on how companies can collect debt.
Don’t pay or provide payment information until services are rendered. A 2010 FTC rule prohibits debt relief and credit repair companies from charging upfront fees.
Don’t fall for promises of quick fixes.
See if you can help yourself by negotiating a lower debt payment for yourself.
You should also request a free copy of your credit report from each of the three major consumer reporting companies every year by visiting annualcreditreport.com.
Finding a reputable debt relief company is also important. You have to research a company thoroughly, check their better business bureau profile.
Check with the National Foundation for Credit Counseling and do a Google search to find recommendations from reputable sources.
