Debt Consolidation Program

Your credit score is like a school report card. It can be biased, it can be wrong, it can be good, and it can be bad. However, contrary to the "permanent record" theory that teachers tend to threaten students with, your credit report only lasts about 10 years. So, a mistake on your credit report will only cost you money for about 10 years. If you want to fix errors now and save yourself thousands of dollars in interest payments on future loans, a credit repair company might be a good option. Or, if you want to prevent damage to your credit report because of bills you are unable to pay, you may want to talk to a consumer credit counselor. There are many options on the Web today for debt consolidation program, and you owe it to yourself to do further research.

Debt consolidation is a process in which a company "buys" all the debt you have from your various creditors and then you pay the firm back. Often credit card companies "sell" the debt to the consolidator for pennies on the dollar. This is how they are able to offer you such low interest rates. Credit card companies are happier to receive 40% of the money than risk seeing nothing if you declare bankruptcy. Everybody is happy. The credit card company gets paid, the consolidation company (often nonprofit) makes money on the loan they give you, and you are happy because you can save thousands of dollars.

Maintaining large credit balances can be very expensive. For example, if you have a current balance of $20,000, with 19.5% interest and a small monthly payment, it would take over 10 years to pay it off and would cost you an additional $20,000+ just for the interest, which almost doubles the total cost of whatever you bought. But if you consolidate your credit card balances, you can cut this down significantly AND pay off the loan in a much shorter time. It might take some discipline, but life does get better with the help of a non-profit credit counselor's help.

Debt collectors can call you at home and even at work (so long as you have not told them to stop calling you at work) until you pay back your loans. You can, however, write them a letter to make them stop calling. This does not take care of the underlying problem, but it can stop them from harassing you. It is debt consolidation program. And, there are many unscrupulous collectors who ignore the Fair Debt Collection laws and still call. Debt consolidation can take of this too without your creditor being able to deny knowledge of having received a letter.

For more information on Fair Debt Collection laws, visit Fair Debt Collection at the FTC's web site.