Can You Get Out of Debt Yourself or Do You Need Credit Repair Services?

Debt is something that cuts across every income level. It is just as easy for those making $200,000 to be seriously in debt as it is for those making $20,000. Perhaps the reasons and causes vary greatly, but the outcome is much the same: creditor calls, mounting bills, and increasing hopelessness. There is relief in knowing that no matter what your level of debt and what your current income, you can find a way to be free of it. The first step is to evaluate your situation and decide if you can handle your bills yourself or if you need credit repair services.

It is important to ask yourself questions and answer very honestly to determine if you need professional assistance in handling your debt. Consider the following:

• Can you stick to a budget on your own? Can you develop a budget for your current income and expenses that leaves money left over for debt payments?
• Can you negotiate with creditors? This can be very intimidating, and it takes not only courage but persistence.
• Do you know how to dispute inaccurate credit report entries?
• Do you have a system, such as the debt snowball or debt avalanche method, which will allow you to pay off debt efficiently?
• Do you know how to start paying off your bills or do you feel like it is overwhelming, frustrating, or impossible?
• Would you benefit from a structured plan, as well as advice and counseling from financial experts?
• How soon do you want to be free of your debt? Do you have realistic expectations?

If you feel you need assistance in any of these areas, it would be wise to consult an expert. There are a myriad of debt services available, from consolidation to debt management to credit repair services. Here are some things you should watch out for:

• Beware of credit repair companies which make claims such as, "We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!" or "We can erase your bad credit – 100% guaranteed." Another claim to avoid is, "We can help you create a new credit identity – legally!" Know that no service can eliminate negative marks on your credit report. The only way to do that is to pay the debt. As for creating a new credit identity? If it is legal, it is certainly unethical and highly suspect.
• Do not sign a contract with companies that charge for services before they are performed. Legally, they cannot do this, so it is important to know your rights.
• Choose a company which informs you of your rights, answers all questions, and provides guidance on steps you can take to resolve debt on your own. This way, you have all the information you need to make a good choice.
• Watch out for firms which advise you not to contact the three major credit bureaus. This is your right – you are even entitled to one free credit report from each bureau every year. No one can or should tell you not to look at it. In fact, monitoring this is an excellent way to safeguard your financial future.

Reputable credit repair services abide by all of the restrictions imposed by the Credit Repair Organizations Act. They must be truthful about what they can and cannot do; they may not charge for services not yet performed; they cannot perform any service without your signed consent on a written contract and must allow a three-day waiting period, during which time you can change your mind without incurring any fees.

Be sure that the credit or debt management company is completely transparent, that is, every step they make is discussed with and approved by you. They will tell you the total cost for their services, which services they will perform, and how long it will take to resolve your debt.

Getting help is an important step, and it can help with debt reduction. Before you do get help, however, make sure you know your rights.credit repair process. One small step allows you to take a bigger step tomorrow.