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Credit Counseling is code for “fraud”

Today was I driving back to work after watering my girlfriends plants at lunch while she is out of town (turns out in 100 degree heat its particularly hard to keep plants from drying up) and I heard an ad on the radio for “The best credit counceling you can get.” Some other common things you hear pretty often are:

  • “Credit problem? Not a problem!”
  • “We can erase your bad credit — 100% guaranteed.”
  • “Get rid of bankruptcy fast!”
  • “We are here to help!”
    fingers crossed

    Ready for the truth?  There is absolutely nothing that can erase bad credit or bankruptcy.  As far as credit counseling goes your best bet is *hold your breathe for this one* yourself! Oh and thepennysaved.com obviously.  Chances are, you already know exactly why you have credit problems.  It boils down to one or more of the following things:

    1) You don’t have enough money to pay your bills
    2) You forgot to pay your bills/ignored your bills
    3) You didn’t know you had an outstanding debt

    Well, instead of going to someone who will charge you for their services, allow me to do the counseling for you.  Solutions:

    1) You don’t have enough money to pay your bills
    You need to reduce your bills or earn more.  This is the most difficult of the three situations.  Sometimes this one is painful, very painful, but its also very simple.

    2) You forgot your bills/ignored your bills
    If you keep forgetting to pay bills (which I do sometimes myself) the best thing to do is find a way to organize it.  I recently started putting all my bills on a tab in my budgeting excel spreadsheet with due dates and its amazing the difference it makes.  If you ignored your bills, don’t ignore your bills.

    3) You didnt know you had an outstanding debt
    This one is the most complex of situations because you may or may not be able to have your credit fixed depending on the situation.  I had a collections agency for blockbuster  report me for “nonpayment” but what happened was that I had paid my late fee at a different location.  I challenged it and won.  On the other hand, a few years ago I had a credit card that I thought I had made the minimum payment on but was actually below it.  The notices of past due were sent to the wrong address so by the time I figured it out I had a blemish on my credit score over a $11 problem.  I contested that one extensively but never could get it fixed.  It hasn’t had a lasting effect on my credit but if it had been something bigger, things could have been much worse.  In any case, the moral of the story is at least try, you have everything to gain.

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