Why or Why-Not Consumer Credit Counseling

The TRUTH about Consumer Credit Counseling

 Empty pockets never held anyone back.  Only empty heads and empty hearts can do that.  ~Norman Vincent Peale In theory consumer credit counseling sounds great, but is it the mature, logical, responsible smart action for you to take if you find yourself in financial straits?   The two-letter answer is NO, not if you care about your credit scores and what it means to your future. I’m sure you have seen the ads about not-for-profit Consumer Credit Counseling firms who want to “help” you get out of debt.   Think about it one minute, how can a non-profit organization afford to pay so much for advertising by providing these free services?   How do the people who work for the Consumer Credit Counseling services get paid?   The secret they don’t want you to know is that lending companies and large banks sponsors them.  They stay in business by getting consumers to pay money to those very same companies and banks!  If they are unable to attract customers through their expensive TV ads, radio and newspaper ads with free 800 numbers they will lose their sponsors.   So in truth who do you think they are truly working for the consumer? The worst secret of all is what happens to your credit report.   The Consumer Credit Counseling firm will assure you that THEY won’t report anything negative on your credit report.   Most of them will gloss over the fact that the creditors they are working with will turn your account information into negatives reporting charge-offs if the debt is settled for less than the original full amount.  This can easily destroy your credit rating.   Then ALL creditors will report you are in a consumer credit counseling program which is the equivalent of a big Red X on your record! Basically Consumer Credit Counseling is a COLLECTION agency sponsored by lenders and creditors.   They are not your friends! From MSN Money article* by By Liz Pulliam Weston "Most of the counseling services' fees are paid by the lenders themselves, which send back to the services a portion of the payments received. This has led some critics to charge that credit counseling is just a tool of the lending industry.

 

 

The payment system, known as "fair share," has certainly encouraged the growth of credit counseling services. And some agencies, driven by competition, are now openly courting consumers who haven't fallen behind on their debts by promising lower interest rates. This development has angered credit-card companies and often hurts consumers, who may find out too late that such plans can hurt their credit ratings and are often unnecessary." 

 

Hopefully this helps you in understanding what the agency's really do and what they don't do. For more infomation give a rep a call today 1-888-829-2169 

 

Prescreened  Credit Offers – Opt Out or Not  "Remember that credit is money” - Benjamin Franklin Some consumers do not want to receive pre screened offeres of credit.Those offers in your mailbox  can fall into the hands of identity thieves, that Alone is enough reason to stop these offers from being received. On the flip side it brings special offers that may benefit you financially to your attention.   The deciding factor for you is that many think it helps your credit score to opt out of receveing these offers. <img src="http://www.usps.com/history/plife/pl041698/mailman.gif" height="300" alt="Mailman tipping hat" width="179" />In order for you to make the best decision for you we suggest you Read directly what the FTC has to say.  From the FTC website is the Facts for Consumers originally published July 2005 - http://www.ftc.gov/bcp/conline/pubs/credit/prescreen.shtm&nbsp; Prescreened Offers of Credit and Insurance Mail Call: Bills, a letter from your Aunt Mary, a circular from a local department store, your monthly bank statement, and an offer for a new credit card that says you’ve been “prescreened” or “prequalified.”  A “prescreened” offer of credit? What’s that? Many companies that solicit new credit card accounts and insurance policies use prescreening to identify potential customers for the products they offer. Prescreened offers — sometimes called “preapproved” offers — are based on information in your credit report that indicates you meet criteria set by the offeror. Usually, prescreened solicitations come via mail, but you also may get them in a phone call or in an email. How does prescreening work? Prescreening works in one of two ways: <img src="http://docs.google.com/PicExportError" height="9" alt="*" width="9" />       a creditor or insurer establishes criteria, like a minimum credit score, and asks a consumer reporting company for a list of people in the company’s database who meet the criteria; or  <img src="http://docs.google.com/PicExportError" height="9" alt="*" width="9" />       a creditor or insurer provides a list of potential customers to a consumer reporting company and asks the company to identify people on the list who meet certain criteria.  Can prescreening hurt my credit report or credit score? No. There will be “inquiries” on your credit report showing which companies obtained your information for prescreening, but those inquiries will not have a negative effect on your credit report or credit score. Can I reduce the number of unsolicited credit and insurance offers I get? If you decide that you don’t want to receive prescreened offers of credit and insurance, you have two choices: You can opt out of receiving them for five years or opt out of receiving them permanently. Call toll-free 1-888-5-OPTOUT (1-888-567-8688) or visit www.optoutprescreen.com for details. The telephone number and website are operated by the major consumer reporting companies. When you call or visit the website, you’ll be asked to provide certain personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out. Remember that if you have joint credit relationships, like a mortgage or a car loan with a spouse, partner, or other adult, you may continue to receive some prescreened solicitations until both of you exercise your opt-out right. Why would someone opt out — or not? Some people prefer not to receive these kinds of offers in the mail, especially if they are not in the market for a new credit card or insurance policy. They may prefer to opt out to limit access to their credit report information for credit and insurance solicitations, or to reduce some mailbox “clutter.” However, some companies send offers that are not based on prescreening, and your federal opt-out right will not stop those kinds of solicitations. As you consider opting out, you should know that prescreened offers can provide many benefits, especially if you are in the market for a credit card or insurance. Prescreened offers can help you learn about what’s available, compare costs, and find the best product for your needs. Because you are pre-selected to receive the offer, you can be turned down only under limited circumstances. The terms of prescreened offers also may be more favorable than those that are available to the general public. In fact, some credit card or insurance products may be available only through prescreened offers.  Does opting out hurt my credit score? Removing your name from prescreened lists has no effect on your ability to apply for or obtain credit or insurance.  If I decide to opt out, how long will it be before I stop getting prescreened offers?
Requests to opt out are processed within five days, but it may take up to 60 days before you stop receiving prescreened offers. What if I opt out and then change my mind? You can use the same toll-free telephone number or website to opt back in. Will calling 1-888-5-OPTOUT or visiting www.optoutprescreen.com stop all unsolicited offers of credit and insurance? Calling the opt-out line or visiting the website will stop the prescreened solicitations that are based on lists from the major consumer reporting companies. You may continue to get solicitations for credit and insurance based on lists from other sources. For example, opting out won’t end solicitations from local merchants, religious and charitable associations, professional and alumni associations, and companies with which you already conduct business. To stop mail from groups like these — as well as mail addressed to “occupant” or “resident” — you must contact each source directly. What other opt-out programs should I know about? The federal government has created the National Do Not Call Registry — a free, easy way to reduce the telemarketing calls you get at home. To register your phone number or to get information about the registry, visit www.donotcall.gov, or call 1-888-382-1222 from the phone number you want to register.The Direct Marketing Association (DMA), a trade association for businesses in direct, database, and interactive global marketing, maintains a Mail Preference Service that lets you opt out of receiving direct mail marketing from many national companies for five years. When you register with this service, your name will be put on a “delete” file and made available to direct-mail marketers. However, your registration will not stop mailings from any organizations that are not registered with the DMA’s Mail Preference Service. To register with DMA, send a letter to: Direct Marketing Association
Mail Preference Service
PO Box 643
Carmel, NY 10512 

 

 

 Your Friend, Drew Canole