There are many businesses out there offering help with debt and credit. Learn the differences between credit counseling vs credit repair to avoid any further financial mishaps.
Differences Between Credit Counseling vs Credit Repair
No matter how you got here, bad credit can affect a lot of different areas of your life. In your research, you may have come across a few financial counseling terms that seem like the same thing. Let’s discuss credit counseling vs credit repair as they are two very common methods people turn to.
What is Credit Counseling?
Credit counseling helps individuals facing too much debt work with their creditors to get lower monthly payments and interest rates, making repayment manageable again. When you contact a reputable non-profit counseling center, professionally trained and certified counselors will help you evaluate the following:
- Your current financial situation
- Provide you with a detailed review of your income, assets and expenses
- Provide personalized options based on your goals, which may include social service referrals, educational materials and resources and a Debt Management Plan or other financial options
Once you have a plan, you can begin to take positive steps and actions to improve your credit over time. Credit counseling is a great way to have an objective third party walk you through your financial situation.
What is Credit Repair?
Credit repair is the process of fixing a bad credit report. No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. For more information on credit reports and scoring see the FTC’s website.
Turning to a business that offers “credit repair” service may seem like a reasonable solution when your bills become unmanageable. However, you should be cautious. Before you do business with any company, check it out with your local consumer protection agency or the Better Business Bureau in the company’s location. One rule to remember is that if a credit repair offer seems too easy or just too good to be true, it probably is too good to be true.
Overall, improving your credit happens over time by making consistent steps forward in the right direction. Paying your bills on time, eliminating debt, and correcting any errors on credit reports are all great ways to get your finances and credit moving again.