If you have accumulated a large debt, you have the option of going to a credit counseling or debt settlement agency in order to remove the burden so that you can finance the purchase of a new home. However, it is important that you are aware of the differences between credit counseling and debt settlement. These companies use different methods in order to repair credit, and you will want to know which option is best for you and what they offer you.
Credit Counseling Might Help You Begin to Get Rid of Debt
If you are searching for real estate, but are concerned that your credit score is not high enough to qualify for financing, consider contacting a credit counseling agency for advice on getting out of debt. Make sure that you contact a reliable credit counseling agency that is a member of the National Foundation of Consumer Counseling .Avoid any company that advertises on TV or specifically solicits your business. Although claiming to be non-profit, some of these agencies make money off of your debt. Don't believe anyone who tells you that your debt will be wiped out.
Use Caution While Improving Your Credit to Finance a Home
Companies that must solicit for clients are having a difficult time building a client base. Therefore, you must question their reputation. In fact, they may have bought a list with your name on it just as any telmarketing.educationeasy.net emarketing company would. Lastly, although your debt can be repaired, never believe an agency who claims that they can wipe out all your debt quickly, since even if you could pay the amount in full now, it will take time for your credit rating to reflect this positively.
Be Careful About Debt Settlement
In some situations, debt settlement can be a reasonable way for prospective home buyers to resolve their debt. However, there are several drawbacks that accompany debt settlement. The debt is forgiven, but it can look similar to bankruptcy on your credit report. In addition, if your account is settled for less than was due, it will be reported as income to the IRS. Once you begin the process of settling a debt through an agency, it is important to complete the process. If you default to the debt settlement company, they keep the money, and your debt with your creditors could be worse than before.
Therefore, when selecting a credit counseling or debt settlement agency, you must be very careful about the company you chose. Ensure that the results of settling your debt will benefit your credit report and allow you purchase the real estate you desire.
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