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Bad credit repair counseling may be very beneficial to some individuals who have no idea how or why they got into the hopeless financial mess they now find themselves. Some people are simply bad at managing money; it doesn’t mean they are bad people. Bad credit repair counseling can take two forms in the US market: 1) Credit counseling and 2) Commercial counseling.

Credit Counseling

Non-profit companies generally provide bad credit repair counseling under this model. You will get the opportunity to sit down with a counselor who will begin the process of helping you dig yourself out of your financial hole. You will need to come to the center with your credit reports in hand from the three credit reporting companies: Equifax, Experian, and TransUnion.

The bad credit repair counseling session will involve intimate talk of your financial spending habits and ultimately will lead to the discussion of how to budget your money more effectively. The counselor will probably have you begin to write down every day, how and on what you spend your money, for a complete one month cycle.

At the next month’s meeting the counselor will have much more specific recommendations for a budget with the hard evidence of your spending laid out on a spread sheet before him or her. It may not always be easy to follow the budget that is proposed to you, but it will help you recover from the financial stress and endless debt you find yourself in now.

The bad credit repair counseling sessions may also concentrate on ways you can deal with disputing negative, incomplete and unverifiable information on your credit report. There are estimates that approximately 70% of credit reports have some type of inaccurate information included on the report. The counselor may lay out the process for you to dispute these inaccuracies on your own time. If you need more help than chatting with a counselor, creating a budget and learning how to challenge your credit report on your own, you may do better with commercial counseling.

Commercial Counseling

Bad credit repair counseling under the commercial model involves paying for the financial advice that you receive. The counseling usually comes with a one-time setup fee and then small monthly installment fees to continue the services. There are many reputable commercial organizations that deal with bad credit repair counseling and most can be found right here on the Internet. These organizations will have a staff of trained professionals such as accountants, money management specialists and sometimes lawyers who can help you with their professional skills.

You will know that you are dealing with a professional organization if they provide you with a copy of the “Consumer Credit File Rights Under State and Federal Law ” before you sign any type of contract for their services. This has been part of the Credit Repair Organizations Act (CROA), which was signed into law back in 1996. The CROA law provides certain protections for a consumer like you looking for financial advice from credit repair organizations.

Bad credit repair counseling with the commercial organization will involve more that just chatting with a counselor, creating a budget and learning how to challenge your credit report on your own. The organization will take proactive steps on your behalf challenging many of the negative, incomplete and unverifiable information on your credit report with hard-hitting letters. They will follow up closely to the response or non-response of the reporting companies to these letters. They will usually be more aggressive than you can be because they know the laws and the industry more intimately than you. They can often result in getting derogatory information off your credit report more quickly than you can because it is their full time job.

Whether you choose free credit counseling or paid credit counseling depends on your time and willingness to put into the process. It takes time and persistence to go with either method because you must begin to change your spending habits from day one. Only you can know if you have the personal fortitude to go the free credit counseling route doing much of the work on your own, or you need to hand over the process to a paid commercial counseling organization who will handle much of the paperwork on your behalf.