Credit rehabilitation programs don't do anything you can't do


To Her Credit
To Her Credit, Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs. See her website for more personal finance tips and free budgeting worksheets.
Ask Sally a question, or read her previous answers in the To Her Credit archive

Dear To Her Credit,
I was on a credit rehabilitation program paying $5 per month using a prepaid credit card. They only accepted credit cards. One month my credit card didn't have enough money on it, and a man called about it. He was very thug-like, threatening to garnish my wages and everything.

I was going to pay and did pay the $5, no problem, but I was very angry about the way that he spoke to me. I called the agency back and used curse words.

The next month when the payment was due, I called them and their number wasn't working. I didn't realize until later that they had blocked me from calling them. I tried to call from a landline pay phone, but they only take calls from numbers they have on their list.

I only had three payments left, but I wasn't able to give them another credit card because they made it so that I couldn't reach them. Where do I go from here? What should I do now? I just wanted to take care of this. Is there any way for me to get on the rehabilitation program again? Who do I get in touch with to start making payments? How is this even legal? They blocked my number and made it so that I couldn't give them a credit card with funds on it to pay. I had the money to pay.   -- Joy


Dear Joy,
Count your blessings and move on.

You must have really blistered the ear of the person on the other end of the line. I'm not much into swearing, but good for you. The only thing I wish you'd done differently is direct it at the "thug-like" character who called you. Or maybe at the person who signed you up for the program in the first place. 

How do you know the company blocked your phone number? Credit repair companies have collected their fees and closed their doors before. I don't see how they could be in business if they're not taking calls.

Not everything that credit rehabilitation programs say is wrong. Credit rehab ads extoll the value of a good credit score. I can't argue with that. They talk about getting on a budget and controlling spending. That's good. The thing that makes credit rehabilitation so attractive to people, I believe, is the same thing that draws people to many other fix-it programs. People want to give their problems over to someone else, or to at least hold their hand. Maybe they're looking for something like a personal trainer for finances.

My problem with many advertised "credit rehabilitation programs" is that they take money from people who can least afford it, make promises they can't keep and then don't do anything that their clients couldn't have done better themselves. You're lucky you were only paying $5 per month. A quick Web search yields credit rehabilitation programs charging a $99 setup fee, plus $59 per month thereafter. That's a lot of money a person could spend actually paying down debt or paying for necessities so they didn't have to go deeper into debt.

Fortunately, you can find someone to help you straighten out your finances and any defaulted debts, and get your life back on track. You don't have to deal with questionable businesses to do it. I recommend finding a nonprofit agency affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. They'll help you make a spending plan, help you come up with a plan for any debt repayments, check your credit, dispute errors on your credit report (no one can do anything about accurate negative marks) and start building a positive credit history.

Don't look back at the credit rehab program that basically ditched you. You can do better. Find real help, instead, as you take care of your credit, your financial goals and your life.

See related: 15 questions that will help you find the right credit counselor

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Published: October 17, 2014

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