Credit Repair companies
Hello Terry,
While listening to your comments to Frederika Whitfield from CNN on Saturday 4/5/2025, you briefly stated to stay away from credit repair companies and that they are a ripoff. Can you elaborate more on why the credit repair companies route is a bad idea.
Terry Says
Many of these companies tell you to send them a check every month — and stop paying your bills. They say they will use that money to “negotiate” with the credit card companies for a settlement for less than the full balance. And that often works!
BUT — and this is a big BUT — in the meantime your credit is ruined. You may be vulnerable to a lien against your wages or property, depending on what and who you owe.
The National Foundation for Credit Counseling (800-388-2227) can either help you figure out how to pay more and adjust your budget (and that doesn’t go on your credit report). Or they can actually negotiate lower interest rates, and lower payments, with your creditors — while you send them a monthly amount and everything gets paid. That DOES go on your credit report — but is far less damaging than a simple default on paying even the minimums.
And, if you’re interested, read this article. It contains the formula for paying down debt in less than 3 years! https://www.terrysavage.com/dealing-with-debt-in-the-new-year/
Thanks for posting your question.
