With
a credit counseling agency, you consolidate your bills by working
with a counselor who will help you determine a monthly payment plan
that will satisfy a minimum amount of the debt. By connecting with a
credit counseling agency in the MyDebtRepair network, consumers can
reach a reputable credit counseling agency. A credit counseling
program typically lasts for about five and a half years. The agency
you work with will contact each of your creditors and offer a
proposal to lower the interest rate to a reasonable 9-10%. With the
new lower interest rate and a consistent payback schedule, you
reasonably can expect to be debt-free at the end of your program.
However, there is a bit of a downside to debt management through a
credit counseling agency. While you are a part of the credit
counseling program, your agency and/or creditors will report to the
credit bureaus that you are a client. Your credit report will be
flagged until you complete the program, and some lenders may not
extend credit to you until the credit counseling program is
satisfied. Additionally, some of your creditors may fail to accept
the proposal of the counseling agency, so it is important to stay
informed so you do not send insufficient payments.
If all of your creditors accept the proposals and you abide by your
debt management plan, your credit will be impacted very little upon
completion, but essentially will be frozen until that time. A
consumer credit counseling agency typically will save you money in
comparison to a consolidation loan, and also will take you less time
to become debt-free. |
