All About Credit Counselors

In This Chapter:
Credit counselors are powerful friends to have when you've gotten yourself into credit problems. Sometimes they are your only friend. Many times these trained experts are able to negotiate on your behalf with the creditors you are behind payments with to lower the interest rate or eliminate the interest rate altogether. This is called a debt consolidation plan. You send the credit counselors one payment, and they payoff your creditors a little bit at a time from your payment. Most creditors will agree to this because it means they'll recover their investment in you instead of writing off a loss, or wasting more money on collection agencies to hound you. Usually one of the provisions of this relaxing of the interest is that you must close the account.

By time you have gotten so deep in debt that you need a credit counselor you should be tearing up all your cards anyway, because you have no business using them anymore. Credit counselors can also work with you to create a budget that will get you out of debt. Because they are trained experts in their field, they are a wealth of useful credit related information and you should get as many pamphlets as you can from them and tap them for as much advice as possible while you are using their services.

Sites to get your online credit report
The top sites to get your credit report from are Equifax or TrueCredit . All these sites allow you to get your online credit report instantly. Be sure you choose the option that gives your credit score too. These sites are reviewed further down the page.

Now is the time to get your credit report
Don't put it off until later, you'll be sorry. Do it now before you even finish reading this page, so you can find out what your score is, and begin your first steps to improve it. It takes 30 to 60 days to get issues with your credit history resolved.

What your credit score tells about you
Credit scores are usually in the 300-900 range, and the higher the better. Credit scores are generated by the credit bureaus when they print your credit report. They do it using software from the Fair Isaac Company, hence the name FICO score. Calculating your credit score is very complicated, based on over 100 parameters in your credit file, including length of credit history, number of open accounts, loans, mortgages, public records, and others. There are other companies that generate credit scores, but the Beacon FICO score is what most lenders use. When you get your Credit Report from Equifax, they call it Score Power. Your credit score is a predictor for lenders, of your ability to pay. The higher your score, the more likely it is that you'll pay back your creditors on time. According to Equifax, 51% of all the people with a credit score from 550-599 will default on their credit. That's scary.