Get Debt Counseling

Written by Abby Luttrell
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If you've ever applied for a credit card, a personal loan, insurance, or a car loan, there's a file about you. This file contains information on where you work and live, how many dependents you have, whether you pay your bills on time, and if you've ever been sued, arrested or filed for bankruptcy. Companies that gather this information are called Consumer Reporting Agencies.

These agencies put out a rating, known as a credit rating, which gives your potential employers, lenders, and insurers an indication of your financial responsibility. Everything from your mortgage rate to the amount of life insurance you can get is determined by this rating. You can be paying a much higher rate of interest on your home than the guy down the street just because of this rating number.

Therefore it's very important to get debt counseling. Consumer credit counseling can help you improve your credit rating so that you aren't victimized by high interest rates. When you get debt counseling, you can even improve your chances of getting a good job.

How To Avoid Bankruptcy

It's especially important to learn how to avoid bankruptcy. Bankruptcy is the single worst thing that can happen to your credit rating, and it stays on your record for 10 years. If you get debt counseling before you are forced to consider bankruptcy, your credit counseling service can help you talk to your creditors and negotiate lower monthly payments so that your credit rating is saved.

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