Think of this article as more of a PSA. I’m not an attorney, and don’t you dare take this as legal advice. I have a significant amount of experience in my field, though, and do perform consultation and training in the debt collection industry. Much of the training revolves around credit and I can say with confidence that I know a fair bit of the in’s and out’s.
The most imperative piece of advice I can offer is to avoid “credit cleanup” services like the plague. I’m not kidding. They’re awful. If you’re charged money, I can assure you that whatever they’re doing could have been done very easily by you on your own, and for significantly less money – including personal time invested – than what they charged. If you’re not being charged… Fear for your ability to obtain credit. Why is this? The most common tactic that they have is to dispute every item on your credit file. Let me be as clear as possible: this is harmful. A lender will look at your credit file and see all of the disputed items. They will then question why they should loan you money if all you do is dispute every transaction you’ve ever had. All that ends up happening is that you end up in a high risk category.
Next would come the simplest solution of paying your bills. Pay them before they end up in bad debt. This requires learning how to budget. If you were never taught, there are many organizations that are willing to teach you how; and most of them will do it for free.
If you do wind up in collections, and this is kind of the purpose of this article to begin with, just work with the agency. Yes, they are likely going to make some serious demands; many of them will probably require lifestyle changes. Most people hate the idea of changing their lifestyle. You have to accept this as fact: your lifestyle clearly needs to change if you’re in collections. The excuse of “I didn’t ask for medical bills” or similar is not a valid argument. At all. Ever. If you don’t already realize it, budgeting for the unknown is a part of “adulting”. If you want out of debt, and want a better credit rating, it’s time to start “adulting”.
-Mike H