Posted by Shawn Maclauchlan
RICHMOND, VA (WWBT) - $900 billion. That's what the Federal Reserve says Americans have in credit card debt.
There are three types of help for people who find themselves in a credit crisis.
One is called debt elimination, and some companies are using that category to claim they can clear your credit report of all bad debt.
From fancy cars, to flashy jewelry, to just getting dinner at your favorite restaurant, there's always a way to spend money you don't have.
When bills add up and your credit starts to suffer, flip through the channels on your TV or through the newspaper and you're bound to find offers to erase your bad debt.
"A lot of these credit repair companies, they're kind of advertising their services under that debt elimination category. That's where you have to careful," said ClearPoint Financial Solutions' Bruce McClary.
Bruce McClary is a certified credit counselor. He says a lot of these companies make big promises, and small deliveries.
"They may not actually deliver what they're promising, but they use some of those promises to get you in the door."
The FTC says if you have bad credit, don't trust anyone who tells you there's an easy fix. It's just not true.
When your credit report turns into a rap sheet, no one can legally remove anything just because you want it gone. If you do get in bed with a company that says it can you clean up your credit, the law says you don't pay until the service they contractually promise is delivered.
"Not only are you out so many dollars of your hard earned money, but you also didn't get the help you needed. In some cases, the advice that they give you may actually put you in a situation that's worse than where you were before you went to them."
The best advice is to go to a non-profit credit counseling agency.
"Oftentimes the counseling session itself is free of charge and the information you get can benefit you because you can actually take that information and use it on your own to resolve some of the credit problems that you're facing."
McClary also says the "for-profit" credit repair companies use the same information to help you that you can get through a free session with a non-profit credit counselor.
If you'd need to find a counselor, go to the National Foundation for Credit Counseling where you can search for a counselor in your area, www.nfcc.org.