Bogus credit counselors can scam you too

As sham credit repair firms finally begin to get the tar and feathers they deserve, many similar scam operations now do business as credit counselors, debt consolidators, and "get out of debt for dimes on the dollar" firms. Similar to their credit repair brethren, these firms typically over-promise, overcharge, and under-deliver.

Rather than detail all of their seedy practices, let me pass along the recommendations of Clark Howard, one of the best consumer intelligence experts in the country. For credit counseling and debt repayment plans, Clark recommends the not-for-profit Myvesta (located at myvesta.com) or Consumer Credit Counseling Service (CCCS).6 CCCS charges its clients a nominal fee of less than $50.

5 Although FICO currently dominates the field of mortgage lending, numerous other scoring systems will soon challenge Fair, Isaac. Such systems will be forthcoming from Fannie Mae, Freddie Mac, FHA, and the Vantage system developed by the three large credit repositories.

6 Formerly known as Debt Counselors of America (DCA). Myvesta's web site offers a cornucopia of credit advice and information.

If you select some other counseling or debt management advisor, get all promises in writing. Do not accept glowing hype. Read your written contract carefully in the comfort of your home. Federal law (the Credit Repair Organization Act) gives you three days to rescind. Do not pay any fees, costs, or debt installments until after you thoroughly investigate the organization.

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