What to do when you have bad credit and need help
Look For A Creditor With Lenient Requirements
First of all you should understand that having bad credit does not necessarily mean that you are going to be turned down by all creditors for a loan application or any form of credit needed. Different creditors have different guidelines for underwriting an application for credit. Some may be more tolerant of credit report fallacies than others. Some creditors may also be willing to take a more personal interest and do a manual evaluation of your financial details. For example, your credit score might have suffered because of some credit mistakes and late payments or unpaid bills in the past. However, a creditor who is willing to do manual underwriting for your application will be willing to look at your other documents such as a recent bill payment history, salary receipts, other financial details etc. that prove that you are now in a better financial condition than you were a few months back. While all these things may not yet have had the chance to affect your credit score, they may be enough to prove to the creditor or the lender that you are now qualified to take on a further loan. If so if this is your situation where you believe you are responsible and capable of taking on credit but similar outlook is not reflected by your credit file, it may be worthwhile to contact the creditors to discuss your credit worthiness with them.
Reach a Repayment Plan Agreement With the Lender
Another fashion in which a creditor can help you is by the agreeing to a repayment plan with you. You can keep track of your bills and come to an agreement with the creditor as to how you can repay that debt by making small payments on a changed and modified the payment schedule.
Contact a Credit Counseling Organization
For people who have a problem with sticking to financial budget or do not see any possible way in which they can handle their current debts within their current income, contacting a credit counseling organization might be a good idea. You can find several government approved credit counseling organizations who are nonprofit and will work with you to solve your credit and financial problems. However, as was the case with credit repair services, you should watch out for the so-called non-profit credit counseling organizations as well. Some of them may claim to be nonprofit but can charge you hundreds and thousands of dollars in fees. They can do this by either charging you hidden fees or by pressurizing you to make so-called voluntary contributions that will only add it.
Enrolling In a Debt Management Plan
Some credit counseling services will only offer one solution all your credit problems and that is entering in to a debt management plan with them. They will help you consolidate and pay off your debt to but only because they are being compensated by the creditors through a commission paid as a percentage of debt that gets re-paid. Many of these credit counseling services have a working and profitable relationships with the creditors. This does not mean that entering in to a debt management plan is a bad thing. Sometimes the nature and the seriousness of a consumer’s debt problem requires that he enters in to a debt management plan. But a business that offers this solution on a “one solution fits all” principle, is probably not looking at your individual personal needs and circumstances. It is more intent on earning a commission from the creditors.
It is a fact that a majority of consumers have benefited from the credit advice and budgeting service remitted by a legitimate non-profit credit counseling service. Even better, these services are generally offered for free by a legitimate non-profit credit counseling outfit.
Find A Legitimate Non-Profit Credit Counseling Organization
If needed legitimate nonprofit organizations and specifically the government approved credit counseling organizations can offer you free seminars, information and advice that will help you tackle your credit repair problems. A credit repair counseling can help you out initially by creating a budget for you based on the financial information that you get them. They will discuss your financial situation in great detail with you so as to make a workable budget that would allow use to pay off your existing debt.
A state-by-state list of government approved credit counseling organizations is available at www.USDOJ.GOV/USD which is the website of the US trustee program. The US trustee program is the organization within the US Department of Justice that supervises bankruptcy cases and trustees. This list gives you approved credit counseling organizations authorized to give you credit counseling before you file for bankruptcy relief.
According to the law you’re required to get credit counseling from a government approved organizations within six months of filing for bankruptcy. A genuine credit counseling organizations will have free counseling to help you. They have certified and trained counselors in the areas of consumer credit and debt and who can further help you in managing your financial situation. An initial counseling session can happen over telephones or even e-mail. An initial counseling session typically last for one hour. In order to ensure that you are meeting with a legitimate and approved credit counseling organization, it is better to arrange a meeting on a face-to-face basis.
Most credit counselors offer services through local offices, Internet and on the telephone. You can find physical offices for credit counseling services located in universities, military bases, credit unions, among housing authorities and branches of the US operated extension service. All the places are likely to operate nonprofit credit counseling programs. Your financial institution such as your bank, local consumer protection agency and friends and family are also a good sources for reference for a legitimate and genuine credit counseling organization.