Making payments through a counseling agency may mean that your credit report reflects late or delinquent payments; however, these ratings are not as detrimental to your credit and do not last as long as filing for bankruptcy.

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Plain and simple, and this is no secret, the better your credit the better your buying power is. That’s just common sense, right? Here’s another way to look at this situation;

Bad Credit = Options

Good Credit = Lots Of Options

What do I mean by this? Well, it’s a concept that I could go into a great deal of depth with, but it would be a LONG article, so we’ll save that portion for another time. But in basic purchasing power terms, look at it like this…

If you have bad credit, it’s like saying “I can get either this or that.”

If you have good credit, it’s like saying “I don’t have to get this or that, I can get whatever I want whenever I want it.”

Do you understand the difference? You still have options with bad credit, but with good credit you’re options have expanded exponentially! So the question then turns to whether or not you, personally, are in favor of having more options. If the answer is yes, then you either must have good credit or you want to turn your bad credit into good credit. If the answer is you don’t want to have options, then do nothing, your credit is right where you need it to be.

The fact of the matter is it’s up to you to decide whether you want to persue credit repair. Once you decide to change your situation, the world of options then opens up to you.

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Different forms of credit card debt solution are easily available in the market. All the solutions come in different forms, but their target is to remove your debt problem. With the help of your credit card debt management, you can select the best plan for consolidating credit card debt. You can even consider seeking credit card debt relief grant if your debt situation is that bad.For more information visit best credit card debt consolidation.

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While bad credit may be obvious to someone who looks at credit reports all day, many times a customer may not realize what their credit issues may be. Credit counseling is an effective way to maintain control of the special finance sales process. If the process is done correctly, an applicant’s expectations will be kept at a reasonable level.

So first of all, what exactly is bad credit? Numerous types of credit report problems are considered a sign of bad credit and could cause a lender to reject an application for a loan. Such problems include: missing a credit card payment, defaulting on a prior loan, filing for bankruptcy in the past seven years, or not paying taxes. Other black marks on a credit report include a judgment filed (perhaps for non-payment of spousal or child support) or any collection activity. To many special finance customers, these may be regular occurrences which they do not consider to be bad credit.

The credit counseling process begins with the customer interview. The credit application should be reviewed during the customer interview. Take the time to find out if there are any potential pitfalls. Look for gaps in residence or employment. Find out the particulars regarding the customer’s living arrangements. Do they rent or own; is the monthly expense split with anyone else? Is the income correctly stated and is it verifiable. This process starts the conversation in a non-confrontational manner. Not only do you get to know your customer better, but this process gets customers talking freely about themselves.

Once the application has been fully reviewed, it’s time to move onto the credit report. Remember the objective here is to keep the customer focused on the “credit decision” and away from a “product decision”. Take the time to explore their credit file to see if there is an explanation for any issues which may present themselves.

All too often, reviewing a credit report with a customer consisted of simply marking all derogatory information with a big, red magic marker. Raise all the red flags possible and beat the customer into submission. Public humiliation was supposed to get customers to acknowledge their bad credit, and make them accept that fact. All this is the name of big profits!

Effective credit counseling involves getting a customer to acknowledge their credit issues without the humiliation. Review the complete credit report, mentioning not only the derogatory information but the positive accounts as well. Look for a positive credit reference which can be used to build a case to present to a lender. A previous auto loan paid reasonably well, or even an auto loan that was paid well for long period of time before it was repossessed can be used as a positive reference. Look for patterns of good credit that may have preceded their current credit problems.

Ask your customer if there was something that happened to them that led up to their credit problems. A catastrophic event, such as a major illness, an employer closing or going out of business, a military call-up, or any number of personal tragedies can lead to credit issues. Now is the time for your customers to tell you their story, so you can relay it to your lenders. Review each line on the credit report with the customer. Ask for explanations and make notations where appropriate.

This may take a little longer than you’re used to but it helps set the stage for reasonable expectations from your customer. It also shows them how much work you’ve got ahead of you to get a loan approved for them.

Take some time to explain the process. After the credit review, explain how a lender determines whether to approve an application. Review the S.A.W. principle most lenders use to consider an applicant. – Stability, Ability and Willingness to Pay. Remember that many “D” tier lenders look at more than just the credit score of an applicant, and in many cases, these lenders do not consider the FICO score of an applicant in their approval process. Marginal lenders look at the total applicant picture to determine if the will approve a deal. An applicant with a stable employment and residence history and a decent income stands a better chance of getting approved for a loan, even with a spotty credit bureau, because the lender knows they will be able to collect the payments, even if they are a little late each month!

Explain “debt to income” and “payment to income” ratios to your customers and how lenders use them to determine what vehicles they will qualify for. Many customers want much more vehicle than they can qualify for, their logic being “I can afford to pay that much”. Explain how lenders, using all the data available form the vast number of loans they make, have determined which loans are most likely to be repaid and base their decisions using this date. They know that any payment which is more than 20% of an applicant’s income has a much more likelihood of leading to a default and repossession. Lenders want to collect payments, and structure their approvals based on the data they have. This is especially true if a customer has had a history of slow or late payments on their previous auto loan. The lender figures “if they couldn’t make that payment without some problems, I want my payment to be lower than that!” Explain that excessive monthly obligations eat up a substantial portion of their income, and most lenders will only consider applicants with less than 50% of the income being used to pay their monthly bills, including rent. This is especially true with a customer that already has an open auto loan and was not planning on trading it in. In either case, explain that the lender typically will ask for a co-signer, but you will submit the application and see what they say. Place the decision in your lenders hand, and let your customer bear the burden of meeting the lender’s requirement for approval.

Take a few minutes to explain how equity can help an approval along. Lenders like to loan less than the book or wholesale value of a vehicle to marginal customers. Sometimes a large down payment can convince a lender that an applicant will make the payments, since they have a stake in the loan. Remind your customers that, while many lenders may consider a loan with no down payment, they typically like to see the taxes, tags and fees paid upfront by the customer. Many customers, who say they don’t have any money available for a down payment, will have cash set aside to pay these fees. They do not view these as down payment, so make sure to ask how they plan to pay the taxes, tags and fees for the vehicle they are trying to buy.

Many customers will go from dealer to dealer trying to get a loan. Often times, they apply to multiple web sites touting easy credit approvals for bad credit customers in the hopes that someone will approve a loan for them, or give a better approval than they may already have gotten elsewhere. As a credit counselor, explain that, for the most part, dealers work with all the same lenders. While there may be one or two new lenders out in the market, you know and work with virtually all available lenders. Explain that the call back from these lenders is based on the information provided, and as such, will not vary from dealer to dealer. As a matter of fact, explain to them that multiple applications can lead a lender to turndown an application due to “excessive inquiries”, which may cause a lender to think that the customer is trying to buy multiple vehicles at different dealers.

Setting customer’s expectations to reality is sometimes the hardest part of the counseling function. Explain to a customer that lenders aren’t in it just to help a dealership sell a car, but to insure that they can collect on the loan. Giving a customer a loan that a lender thinks the customer can’t afford does no one any good. Lenders don’t want to make a loan today only to repossess the vehicle tomorrow; they make their money only if they can collect the payments. Explain that, in order to help rebuild their credit; customers with credit issues must “crawl before they walk”. This is all part of the process of rebuilding their credit. There has to be a strong foundation to build on; no one builds a house from the roof down!

Lenders realize that credit challenges usually result in setbacks for these customers. Your job is to help them overcome these setbacks. This is typically the beginning of the process to rebuild their credit. They have to start out with a vehicle that not only will fit their budget, but provide reliable transportation while they rebuild their payment history. Once favorable payment history is on their credit bureau, they can move up to a better vehicle with more favorable terms.

Let you customers know your dealership will be there in the future to let them know when the time is right to make that move. As their automotive credit counselor, you are in touch with to help move them along the path to better credit! Not only will they get an auto loan with your help, but by paying this loan on time, they are well on their way to a credit card and maybe even a mortgage. You can even provide them with a list of banks that provide Visa or MasterCard accounts to folks with credit challenges, or with information which may help them improve their credit reports for free, instead of throwing money away on a scam “credit repair” company.

To review the credit counseling process:

• Review the credit application
• Review the credit bureau
• Look for positive as well as negative references
• Explain the process
• Explain SAW and how a lender looks at the application
• Review debt-to-income and payment-to-income ratios
• Determine the available down payment
• Set the customer’s expectations to reality
• Review the qualifying vehicles
• Review how to improve the loan
• Explain the credit rebuilding process
• Explain “credit shopping”
• The effect of excessive inquiries

Being a credit counselor before the sale will help you close that many more special finance sales. Take the time to talk to your customers about their credit situation and show that you can provide some answers to their problem. If you do this up front, you will establish a relationship with these customers that will allow you to maintain control over the sales process, which is essential for special finance. Not only that, but it prevent you from educating a customer you thought was a no sale, only to send him somewhere else to buy a vehicle.

Geoff Cohen is a seasoned auto professional, with over 30 years experience. He has done it all, from sales rep to F&I Manager, New Car Manager, Used Vehicle Manager, up to GSM and GM. He has also worked as an area sales manager for a major sub-prime lender as well as run his own BHPH and Auto Leasing/Brokerage company.. He is the National Accounts Manager for AutoLending Network and is a contributing author to several blogs about Special Finance solutions for auto dealers as well as F&I Magazine and World of Special Finance Magazine

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These are the important guidelines for choosing credit counseling agencies:
• A certified counselor will do your budget, including your expenses and income.
• They will figure out the total amount of debt you owe and arrive at a figure you can pay each month toward that debt while satisfying your creditors’ requirements.
• Once all parties agree on the monthly amount required to liquidate your debts, you send that amount to the counseling agency each month. They distribute the funds to your creditors, who have agreed to accept a lower interest rate (and perhaps a lower monthly payment).
• The greatest savings you will see by using a credit counseling agency is that they can get creditors to lower or eliminate interest as well as other finance charges, late payments, and other penalties.
• Since most non-profit counseling agencies have to charge a start-up and monthly maintenance fee, find out up front what the cost will be and make sure they put it in writing.

Their mission is to help families in financial crisis and solve money management problems through education and professional counseling.

By utilizing educational programs, professional counseling and money management instructions, Consolidated Credit establishes a customized program that fits your needs.

When you contact Consolidated Credit, you will be working with a highly trained counselor who will begin the process of freeing you from your financial misfortunes, regardless of your circumstances. This is a confidential exchange and you can expect to be treated with the utmost care and respect. We are here to provide you with a plan and a chance to become debt free.

Consolidated Credit is a member of the Better Business Bureau, the United States Chamber of Commerce, the Greater Fort Lauderdale Chamber of Commerce, the Association of Independent Consumer Credit Counseling Agencies, and the American Collection Association.

BANKRUPTCY IN CREDIT COUNSELING ORGANIZATION:
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order.

The credit counseling services check out whether debtors can pay at least 60% or more of their debts so that they don’t have to file bankruptcy. Moreover, those opting for bankruptcy will have to go through a Means Test which can determine the type of bankruptcy that he should file. When you qualify through the Means Test, the court appoints a bankruptcy trustee to supervise the payment of your debts. Usually payments towards secured debts like mortgages are given priority over unsecured debts during a bankruptcy case. Otherwise the lender may take away the property acting as collateral for the secured debt.

The Bankruptcy proceeding has two aims. They are :
1. To free the individual from the pressures of creditors (people they owe money to) to enable him or her to make a fresh start.
2. To ensure that all assets (such as property and investments) are distributed fairly among the creditors.

The primary advantage of bankruptcy is that for the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year

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The first tip in our credit secrets bible is making sure you know what lenders do about your information. No credit secrets bible would be complete without advice this advice. To follow this credit secrets bible tip, make sure you pull your credit at least annually to see what’s in the reports and if anything is awry. You can do this credit secrets bible must once a year without having to pay a dime, too.

Now that you know what creditors do about your history, the next tip in our credit secrets bible is to make sure you don’t overextend yourself with credit. While the credit score is only based on your history and your ability to pay back on time as agreed, the interest rate tacked on to a loan or credit card will take more into account. Therefore, this credit secrets bible advice is to make sure your credit to income ratio isn’t too high. Don’t have too much of your income tied up in obligations to ensure you get the best loan and credit offers.

The next bit of advice in our credit secrets bible is to make sure obligations are paid on time and within the bounds of the individual agreements. If you do this, you will find your credit score should be quite impressive. This can be the hard part, especially when emergencies arise, but it’s important to carry through and pay debts as they are owed, when they are owed.

Lastly, this tip from our credit secrets bible is one that’s very hard for most to follow. But, alas, it’s also the best advice the credit secrets bible has to offer. Learn how to say no to debts you don’t need to incur. Every movie, every dinner out, every vacation charged is a hit against your credit if you don’t pay it off in a timely fashion. If you’re reaching your spending limits or can’t make more than your minimum payments, just say no. The credit secrets bible isn’t effective unless this measure is employed.

While you are ultimately responsible to make sure your credit report is accurate and your input to it is good, our credit secrets bible offers some very good common sense advice to help you along the way. If you follow the tips in the credit secrets bible, you should find your scores are right where you need them to be.

Milos Pesic is an expert in the field of Credit Repair and runs a highly popular and comprehensive Credit Repair web site. For more articles and resources on Credit Repair related topics, Refinancing, Credit Counseling and much more visit his site at:

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Step 1: Realize That Loyalty Is A Bygone

Let’s get something clear right off the bat… There is no room for loyalty or chivalry in the credit card world. If you have a credit card that’s charging you 9.9 percent interest and you get an offer for a credit card with a 4.9 interest rate, switch credit cards no matter how nice you think your current credit card company is.

You may be afraid of change, you may think it’s a hassle, but a lower interest rate can save you hundreds of dollars. Trust me, if you want to know how loyal your credit card company is, consider what happens if you make a couple of late payments and see how well they treat you. That should clear things up right quick. (I obviously don’t recommend making late payments.)

Step 2: Understand A Credit Card Is Cash, Not Plastic

For some reason, many consumers don’t realize they are spending cash when they make a credit card purchase. Because of this, it’s easier to spend more money than you should when paying with a credit card.

If you want to maintain great credit card health, you absolutely must start looking at credit card purchases as if you were taking out a cash loan to pay for your purchase. While that $450 leather jacket may seem really nice, you’ll probably think twice about charging it if you view your credit card as a cash loan.

Step 3: Be Neurotic

Yes, it sounds odd. Why in the world would someone want to be neurotic? Well, if you’re not neurotic about paying your credit card bills on time, it will cost you hundreds of dollars.

Most credit cards increase your interest rate the minute you make your first late payment. Then, thanks to something called a Universal Default Agreement, all of your other credit card companies can follow suit and raise the interest rate you pay them too. Depending on how much credit card debt you carry, that can add up to quite the pretty penny over time.

Step 4: Get Plugged In

Grace periods are getting shorter, late payment penalties are getting harsher and the postal service is as unreliable as ever.

What does this mean to you? It means you need to get your credit card statement online.

By having your credit card statement emailed to you the same day it is generated, you can make your payment online that very same day, ensuring that your credit card payments are never late and your credit card company has no reason to play their “penalty” game with you.

Step 5: Learn What Credit Card Works Best For You

The credit card that’s perfect for your friend may not be the same credit card that’s perfect for you. For instance, someone who pays their credit card balance in full each month will benefit from a rewards card, but because rewards cards come with higher interest rates, someone who carries a balance on their card would be better served by a low-interest credit card.

If you want to make sure your credit card future is a happy one, you’d best learn which credit cards best suit your needs.

Step 6: Continue Your Credit Card Education

An informed credit card user is a happy one. Credit card laws are changing constantly and the tricks and cons of the credit card world are ever-evolving. If you want to keep your credit card health in good shape, you have to remain on top of your credit card game.

Keep up on credit card news and make sure you read any policy changes or changes in the terms and conditions of each credit card you carry.

By following these six simple steps, you’ll be well on your way to managing your credit card finances and paving the way for a healthy financial future.

For more tips on getting the best credit card, saving money and avoiding getting ripped off, try visiting www.creditcardtipsetc.com, a website that specializes in providing credit card tips, advice and resources.

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Look for NonProfit Companies

If you need credit counseling, consider looking for companies who run as a nonprofit. You should only use these companies as a last resort and not as a way to escape your commitments to your creditors. However, if you feel you cannot manage your debt load, you should seek help to find a solution to your financial problem.

On the other hand, if you can take small steps to pay off your debt without outside help, you will build good money management skills. You can, for example, call your creditors and explain your situation. This means you have a chance to hear what the other party thinks about your delinquent account. Most times it is not what you are thinking. Most creditors prefer to work with you to help you repay as much money as possible. They don’t want you to declare bankruptcy because they stand to lose all their money.

You can also decide to make a larger payment on your credit cards. This may mean taking another job or selling some of your valuables, but it is a step in the right direction. However, if you decide to work with a credit counseling firm, you should do careful research about the company. Check with the Better Business Bureau in your local area to see if there are any complaints on file. You could even have a friend visit the company and pretend she is looking to work with the company.

Avoid Fees

A warning sign that a credit counseling company may be fraudulent is if they require that you pay any fees before they begin working with you. While a small fee may be all right, a company charging excessive fees may cost you more money in the long run and offset any savings you might get from consolidating your debts. Remember that you want to lower your debt, not add any extra costs to your existing debt. If the fees seem unreasonable, you may want to ask your friends about them.

False Advertising

If you are looking for a credit counseling company, you should avoid those companies that offer a quick fix for your credit. It likely took you a long time to amass your debt, and there is no program that can help you get out of debt overnight. If the company promises to wave a magic wand and wipe out your debt, or fix your credit history without any effort on your part, there is a good chance that they are a fraud. Often, any steps they might take to try to fix your credit may be illegal and cause you more harm than good.

Unsolicited Emails

If you are in need of a credit counseling company, it is important that you go and look for a company yourself. Many people receive unsolicited emails offering credit counseling and, many times, these are scams. If you contact a company and then they contact you, this is acceptable. But those who come looking for you are usually companies to stay away from.

Credit counseling can be an important way to help you get control of your debt, especially if you are close to bankruptcy. If there are ways that you can help yourself work to get out of debt, this may be a better answer than turning to a counseling company. If you do find yourself in need of a credit counseling company, be sure to check out the company to be sure that they are legitimate. Remember that choosing the wrong company can get you into even greater debt.

Get the latest in credit counseling know how from the only true source at http://www.debtexpire.com. Check out our credit counseling pages.

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How to choose a debt consolidation credit counseling agency? There are numerous debt consolidation credit counseling agencies that have mushroomed all over. Therefore, you must be vigilant in selecting an agency to turn to. One of the main aspects that you must check is if the specific debt consolidation credit counseling agency is accredited to any third party organization. This means that another organization confirms that the specific debt consolidation credit counseling agency follows high standards to provide high quality service to consumers. Which organizations provide accreditation to debt consolidation credit counseling agency? One of the most well known organizations that accredit a debt consolidation credit counseling agency is the Council on Accreditation of Services for Families and Children, Inc. (COA). This organization provides a guarantee that the specific debt consolidation credit counseling agency will adhere to set high standards to provide service delivery, counselor certification, fiscal integrity, and volunteer Board governance.

Accreditation by the COA can be a sure shot method to select your debt consolidation credit counseling agency because COA does not accredits any agency. They accredit only those agencies that meet their exacting standards. National Foundation for Credit Counseling (NFCC) is another organization that can provide accreditation to a debt consolidation credit counseling agency. NFCC-certified debt consolidation credit counseling agents are required to take a rigorous training and testing program. The debt consolidation credit counseling agencies must adhere to several service-specific quality standards to obtain accreditation. For example, they must annually audit their operating and trust accounts and adhere to all consumer disclosure requirements set by the Federal Trade Commission. The agencies must disburse funds daily and immediately in case of emergencies.

They must provide an assessment of reasons for financial problems, a comprehensive financial plan, and a written plan of action to each consumer. Finally, the debt consolidation credit counseling agencies must ensure that their clients receive at least a quarterly statement. Additionally, to get accredited to the COA, the debt consolidation credit counseling agencies must adhere to COA standards for service delivery and quality. They must cater to the requirements of cultural or ethnic population groups in the communities they serve. They must provide indiscriminate and equitable treatment and charge only a minimal fee from all consumers. They must start educational programs and employ NFCC-certified counselors. Finally, they must have a branch counseling network to provide client support.

The scriptwriter Linden Walhard is interested in subjects dealing with credit consolidation. His articles on credit counceling can be discovered on http://www.creditenio.com and also other online publications.

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