Consumer Payment Card News

Consumers w/Crappy Credit w/Rebuilding Desire Have a Solution

A MD-DE area consumer credit counseling service is now promoting a unique loan for consumers looking to rebuild their less-than-desirable credit. Guidewell Financial Solutions, which provides free, confidential budget and credit counseling at their local offices and by phone, is now offering the Save2Build loan.

To take part in this program, clients must be at least 18 years of age, have enough income to cover loan payments, and have no bankruptcy or late payments within the past three months.

Enrollees are issued a 12-month, $300 loan that is placed in a locked savings account. They then make payments of approximately $26/month, which are reported to at least two of the three major credit reporting companies. Once their loan is paid in full, they receive the $300 and can use it to continue credit building by opening a secured credit card or paying off outstanding collections debt.

The loan is offered through Justine PETERSEN and its Credit Building Nations initiative.

Guidewell Financial also offers a voluntary debt management program (DMP) provides clients with a structured, method to repay the principal on their debts. Once they enroll, Guidewell Financial negotiates repayment agreements, including concessions such as reduced interest rates or waiver of late payment fees, with each one of their creditors. Clients then provide the agency with a single payment each month that is distributed directly to their unsecured creditors.

A typical DMP takes three-to-four years to complete. During that time, clients receive ongoing encouragement and resources.

Consumers who hope to rebuild their credit sometimes request help from for-profit credit repair companies who promise rapid results.

However, the Federal Trade Commission (FTC) advises consumers to carefully research before hiring a credit repair company. The Credit Repair Organizations Act makes it illegal for credit repair companies to lie about what they can do or charge you before they perform services. By law, they must provide a written contract that describes your legal rights and details the services they will provide. This agreement should also tell you how long it will take for them to get results, the total amount you will pay, and list any guarantees.

Consumers who enroll in credit repair have a three-day right to cancel without charge. They can also file a formal complaint with the FTC if companies don’t live up to their promises.



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