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What Is The Difference Between Credit Counseling And Credit Repair?


Improving your credit score and paying down your debts go together, but they are two separate personal finance goals.  Some people are trying to improve their credit scores so they can get out of debt, while others are trying to pay down their debts in order to improve their credit scores.  In the latter case, the larger goal is sometimes to qualify for a loan with strict eligibility requirements, such as a federally insured home mortgage loan.  Some organizations offer credit counseling or credit repair.  If all they are doing is giving advice free of charge, then these services are helpful, but you should beware of paying for these services, at least until you have thoroughly understood the terms and conditions of payment.  For more comprehensive solutions for rebuilding your creditworthiness after suffering a financial hardship, contact a Plantation credit repair lawyer.

Credit Counseling Services Give You Advice, but You Have to Do the Work Yourself

Credit counseling services provide information and advice about how to pay down your debts.  They might provide information about the following things:

  • Creating a budget and sticking to it
  • Eliminating unnecessary expenses, such as subscriptions you don’t use
  • Comparison shopping for large or recurring expenses
  • Finding loans with the lowest possible interest rates
  • Transferring your credit card balance to a card with lower interest

They might even notify you of less expensive options that are available to you, such as cell phone plans or telecommunications packages that are available in your area and cost less than the ones you have.  In the end, though, it is up to you to pick up the phone and call the phone company to change your plan.

Credit Repair Focuses Only on Your Credit Score

Perhaps it would be better to call credit repair “credit score repair” or “credit report repair.”  It is concerned exclusively with ensuring that your credit report is accurate and that it does not contain any mistakes that could adversely affect your credit score.  Approximately 20 percent of credit reports contain at least one item that should no longer appear because too much time has passed or because the debt has been repaid.

Credit repair services simply obtain your credit report, review it carefully, and contact creditors about removing incorrect information.  You could do all of this by yourself, too, but it is time consuming.  You should only pay for credit repair services if you think that spending money to have someone correct the errors, if any, on your credit report is worth the time you would save by not having to do it yourself.

When You Need More Than Just Credit Counseling or Credit Repair

Neither credit counseling nor credit repair will result in a major improvement in your credit score over a short period of time.  Getting out of debt is a long process.  If your debt problems are so severe that credit counseling and credit repair cannot help, a lawyer may be able to help you settle your debts or seek bankruptcy protection.

Contact a South Florida Debt Lawyer About Thinking Beyond Your Credit Score

A South Florida debt lawyer can help you meet your long-term financial goals, including but not limited to improving your credit score.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.



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