3 myths about debt consolidation companies

CNNmoney recently featured an article highlighting key things that debt consolidation companies can’t do. One of which happens to be illegal. But, people keep falling for these ‘con’-sters because of the hole they’ve dug themselves in with debt. If you’re in the thick of it and can’t see a way out, don’t fall for these common myths about debt consolidation companies.

Myth 1: Getting out of debt is easy. The less reputable debt consolidation companies will promise you that they can fix your mess easily and quickly. And, some even claim to help you increase your credit score in the process.
Truth: Getting out of debt is a tough road. Sure, it’s a bumpy ride, but it’s worth it. See number 3. in Do you need a game plan for your finances?

Myth 2: We can clean up your credit history. That’s right. Some of these debt consolidation companies make the audacious claim that they can ‘cleanse’ your credit report of all of the bad marks.
Truth: Not only can they not clean your credit history, it’s illegal. The only items that can be removed from your credit report are debts that are inaccurate. But, the only way you clean up your credit report, is by paying your bills on time. And this takes a little while.

Myth 3: Only a debt consolidation company can help me get out of debt. The reason you’ve seen an increase in television commercials and radio ads for debt relief, is that people believe these are ‘needed’ services.
Truth: You don’t need a debt consolidation company at all. These companies can’t do anything you can’t do on your own. In fact, some of the ways these companies ’serve’ their clients is by negotiating with creditors on your behalf. Listen, nobody knows your situation better than you. Why would you let a complete stranger handle it for you? See number 3 in Do you need a game plan for your finances?

Digg This!