There are many ways you can go about discovering if a company is legitimate.  The internet is a great place to begin your research of the different companies.  Search for consumer reviews and testimonials about the specific company or service you are interested in signing up for.  It is also a good idea to check the Federal Trade Commission or FTC website for more information about the company or service you choose.  The FTC governs the credit industry so they will have good and bad information about the different companies that are out there.  Choose wisely because if something sounds too good to be true, many times it is and you end up not getting the help you really need.

When writing the letter to the specific CRA you should include all of your current personal information.  Name, address, the current date and a copy of your credit report with a circle around which transaction you are disputing.  Never include original copies because you will not get those back.  It is very important to be specific about your claim and show as much documentation as possible.  Include copies of receipts, bank statements, or any other documentation pertaining to the transaction to show the discrepancy.  The CRA will investigate your claim within 30 days and if you supplied all of the correct information, the error should be fixed without a problem.  Any transactions that the CRA cannot verify as accurate, within those 30 days, will also be removed from your credit history.  Repairing errors on your credit report can change your credit score so it is important to know exactly what is on your credit report as frequently as possible.

Most debt counselors begin by teaching you how to access and read your current credit report.  Some guide you to listing your debts in order by amount so you can begin eliminating the smaller amounts first.  Others help you list your debts in interest rate order so you can pay off your higher interest debts first.  A debt counselor, with your permission, can act on your behalf in an attempt to lower your interest rates or consolidate some of your debts.   Debtors tend to respond better to counseling services because they can see that you have sought the help of a professional and that you are currently on the road to a better financial situation.  If you are thinking about enlisting or hiring the help of a debt counselor or service, be prepared to disclose your entire financial portfolio.  Assets, investments, and savings must all be disclosed if you are looking for an effective result.

Debt counseling services can only be as effective as you want them to be.  The job of a counselor is to teach and guide you to a better financial state but the rest is entirely up to you.  The path to financial freedom begins with honesty and continues as you stay committed and focused on the established plan.  It is wise to consult with your counselor if you deviate from the plan or gain new debts.  Any changes you make can affect the end result.

The answer is unique to your individual financial situation and the amount of debt owed.  Generally, most people consolidate debt in an effort to reduce the monthly expenditures and give them time to pay off the combined balance.  In most cases, it will cost you more money because the amount to be paid is stretched over a longer period of time, with added interest.

The truth is:  no one gets rid of debt through a consolidation program.  However, if you want to free up some cash during the month, and you are tired of shuffling the bills, consolidating debt may be worth paying more interest in the long run.

But, when looking for the right consolidation lender, it is important to be extremely careful.  Many people have lost their financial shirt, so to speak, because the company or individual with the loan sees a desperate person coming, who will not notice they are being charged an unrealistic amount for the loan.

When searching a consolidation lender, you have 3 choices:

1.    Bank
2.    Credit Union
3.    Person to Person

Traditionally, most people will go to a bank or credit union with which they already have a business relationship.  If you are already a good customer, who pays bills on time and has an established checking or savings account, it may be easier to get some kind of deal that will make the debt consolidation loan worth the effort.

If the banks or credit unions turn you down, sometimes you can establish a contract with another person to float you a loan.  The interest rate will probably be higher than the bank, the length of the loan may be less, but you can combine your bills into one lump sum.

However, before signing on the dotted line, make sure to read all of the fine print and understand what you are committing to in the process.  Otherwise, you can get into even bigger financial trouble.  For example, if your home is used as collateral for the loan, and you default, foreclosure can be in the future and you will have no recourse.

In short, before committing to any debt consolidation programs, remember you still have the same debt and probably more.  It is just spread out over a more manageable period of time. In addition, because you are desperate to improve your financial standing, it is an opportunity for some lenders to really take advantage of your situation.  So, it is important to do your homework, understand the pros and cons of your decision, and always read the fine print.