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Will technology replace appraisers?

National Mortgage Professional
Jun 06, 2005

Credit restoration vs. debt management Sherene Costanzocredit restoration, debt management, credit scores There are television and radio commercials everywhere for debt management companies. Can these companies actually help? What can they do for individuals drowning in debt? A debt management company, also known as debt consolidation or debt settlement companies, helps individuals who are currently buried in debt and cannot seem to dig themselves out. The hole seems to be getting deeper and deeper. The late payments and interest payments are stacking up higher and higher. This is when a debt management/settlement company may be helpful. These companies may help bring an individual's bills under control; however, these companies do not help improve an individual's credit score, and they will usually make the score worse. Once the debt is paid off, improved credit behaviors over several years will finally help increase the score. Although, let's not forget to mention the negative marks these companies help place on their client's credit: They will remain on clients' credit reports for seven years. This makes it difficult to be approved for new credit in the future. So, make sure debt management is your last resort before allowing it to destroy your credit rating. As with every business, it is important to shop around for a credible debt management company. Be sure to research before settling for just any company. If an individual's outstanding debt is considerably high, one might want to consider speaking to a bankruptcy attorney before signing on to a debt management company. They will then be able to determine which alternative is best for their situation. However, avoiding these alternatives, if at all possible, is beneficial to an individual's credit rating. So, if debt management companies can't improve your client's credit score, what should they do? Who can help them? This is when a credit restoration company can help. A credit restoration company does not focus on managing debt or paying off bills. The main focus of a credit restoration company is to increase individuals' credit scores as well as their credit behavior in order to improve and maintain their score indefinitely. A credit restoration company may help increase individuals' scores within 30-90 days and enable them to qualify for the loan they need. However, it is extremely important for individuals to be educated regarding their credit and improve their credit behavior. Many credit restoration companies will implement education on credit behavior for their clients. In other words, by using a credit restoration program, clients will benefit from an improved score, as well as gain knowledge about obtaining and maintaining excellent credit. It is somewhat of an educational course that should be required in high school and college. Eighty percent of Americans would be in a better position now had they taken Credit 101 during their school days, but instead, students are being bombarded by credit offers from every angle. It is beneficial for anyone with a low credit score to take advantage of what a credit restoration company can offer. Just remember that when you are considering a credit restoration company, make sure it is a reputable one that will not only improve your credit score, but also educate you on how to maintain and further improve that score in the future. Sherene Costanzo is vice president of Credit Consultants Inc. She may be reached at (888) 522-7007 or e-mail [email protected]
Published
Jun 06, 2005
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