Consumer debt often reaches the highest peak every year. There is a data that says in 2004, there are 1.5 million people that declare bankruptcy. The debts, either caused by overspending, unemployment, or illness could be the most stressing situation you’ve ever faced. This stress feeling makes you more aware for things that could make you fix this condition fast. You’ll start seeing the advertisements that say “Wipe out all of your debts and start consolidating your loans!” or “Stop the credit harassment, repossessions, tax levies, foreclosures, and garnishment!” and so on.
You probably think that these ads often created for people who need help in their financial life. However, if you see deeper, you could figure out the real motive behind it. You could see that these ads are created for people who near bankruptcy that have nowhere to go. This probably the best choice for your financial condition today, but the impact will be worst in the future. You will have a negative impact in your credit worthiness and it could stain your credit report for 10 years. This also could make you have problems in getting insurance, job, credits, even place to live.
The people who have financial problems usually will contact the person from the ads that you see above. These companies, not all of them are good. Some of them are scams that usually targeting people with bad or no credit. These scam companies will ask you to pay some upfront fees and then tell you that they could “guarantee” you to get the credit that you want, usually in a form of personal loan credit card.
The upfront fees that you need to pay could be as high as several hundred dollars. You need to resist the temptation of giving them any advanced fee when they promised you the world. The legitimate company will ask you for an appraisal fee or application fee, but they are NOT guaranteeing you to get the loan. There is a federal Telemarketing Sales Rule that says a seller or telemarketer who guarantees or represents a high likelihood of your getting a loan or some other extension of credit may not ask for or receive payment until you’ve received the loan.
You could see many of these advance-fee loans everywhere. You could find some of them on the TV, newspapers, or magazines that you have. They usually have a contact number with “900” where you’ll be charged to make a call. Also, they will use delivery systems to send the papers to your house without using U.S. Postal Service. They do this to avoid any prosecution and detection from postal authorities.
When you’re doubting whether the loan is legitimate or not, see the requirements that they need from you. The legitimate creditor like banks or mortgage brokers will require you to subject a check of your credit report when you apply to make sure you meet their criteria. The illegitimate ones will require you none of this. They will say that no matter how bad your credit is, they could get the loan for you. Stay away from this one!
The main point is, if the company makes a guarantee to get you the loan before they see your credit report before you apply, avoid this at all costs!