All About Credit Cards Here

Many Americans ask “Can credit counseling hurt my credit?” if they are in financial trouble and see an advertisement for services that claim to help people in debt. Unfortunately, the truth about credit counseling and its impact on your finances isn’t easy to pin down. Much of it depends on the type of credit counseling you choose.

Can credit counseling hurt my credit?

The counseling aspect of credit counseling cannot hurt your credit. If you go to a reputable credit counseling agency, you can meet with a counselor who can evaluate your financial situation and help you figure out your options. You may receive budget counseling, savings counseling, or information about utilizeful programs. However, that is where the counseling aspect of credit counseling ends. Anything beyond a simple discussion can affect your credit.

Can other aspects of credit counseling hurt my credit?

Unfortunately, yes. Anything beyond discussing your financial scenario can have a negative impact on your credit report. Some so-called credit counseling companies don’t offer counseling at all, but instead offer to negotiate debts on your behalf or put you on a debt management plan. When you run into these programs, you need to be extremely wary about how you proceed. Each of these types of programs can negatively impact your credit report.

How does the debt negotiation aspect of credit counseling hurt my credit?

When you sign up for debt negotiation, you agree to turn your credit accounts over to a third party, who attempts to lower your debt by making deals with a creditor. However, creditors are typically unwilling to cut deals until your finances are behind; in most cases, you must be in substantial default before you can negotiate with creditors. You should only consider debt negotiation plans if you’re seriously behind on your payments.

If you sign up for a debt negotiation plan, but you’re not behind on your debt, some of these companies hold your monthly payments so that you fall behind. This gives them the leverage they need to negotiate with creditors and lower your debt. Your credit report reflects the lack of payment as late pays or default, and your credit score may drop drastically. These companies may call themselves credit counseling agencies, but do not offer any actual counseling; they simply charge you fees to mess up your credit report.

How can debt management programs associated with credit counseling hurt my credit?

Some genuine credit counseling agencies offer debt management programs as a way to address your financial problems. With debt management programs, you pay a lump sum every month, and the program distributes payments to your creditors. In some cases, these payments may be less than your minimum monthly payment. This can cause negative entries on your credit report, as well as increasing your debt due to late fees or underpayment fees. Plus, the creditor may report late payments to the credit bureaus, and a note will appear saying that you are working with a credit counselor. However, your credit score won’t drop just becautilize you are getting credit counseling, and it may help you in the long run if a record of regular payments appears on your credit report.

This article is brought to you by www.JemCreditCards.com – More than credit card accounts, we build financial stability. A great place to compare the best credit card offers including Discover balance transfer credit cards, Chase credit cards, and much much more!

Credit Cards News bad credit, credit, credit rating, credit score, debt

Years ago, consumers could purchase many things on credit. However, unlike the way we go about obtaining credit was a bit different. Instead of having to sign a document saying that you will pay back any debt owed, all consumers would need to do is simply have a firm handshake. Obviously that did not work that well or this would still be the way we go about getting new credit lines. The loss of a great deal of money has caused banks and credit reporting agencies to work hand in hand to figure out who is worthy of obtaining a new loan. With this, credit scores have come into place. Now before you are worthy of a loan, you must have a good credit rating. But how do you go about building credit without having a good credit rating?

Well, building good credit scores may prove difficult and take a long time. There are many ways to go about starting this process. You could get a new cell phone on a contract or a new cable bill but ultimately, these processes will take quite some time. On the other hand, getting a secured charge card can prove to be the better way to go. Credit cards have proved time and time again to be a great method for building good credit ratings. So what is a secured charge card and how do you go about getting one?

A secured credit card is a charge card that is secured by an initial deposit you use to open the account. When you fill out the application for one of these cards, it will most likely need to be coupled with a deposit of somewhere between $300 and $500. This deposit then becomes your credit limit. Once the deposit is made and the card is activated, you are able to use it just like any other card the only difference is that you are essentially paying interest to borrow your own money. Why would you want to pay to borrow your own money? The answer is simple, the risk factor for the bank is not there when they are not lending you money. Borrowing your own money gives the banks and credit reporting agencies a way to see how responsible you can be when offered credit. How you maintain your secured card is most likely going to be the same way you maintain an unsecured card. After a while you will get your deposit back and your secured card then becomes an unsecured card. Getting one of these cards is also fairly simple. There are many websites all over the internet such as www.JemCreditCards.com that allow you to apply rite there online. You don’t need credit so as long as you fill out the application and you have the initial deposit at hand, you will be approved. Also, in my research I have found that Chase credit cards and Discover credit cards offer the best credit building cards.

Credit Cards News credit card, credit cards, credit rating, credit score, credit scores