Credit providers check an individual’s credit report as this:

• Allows credit providers to assess how the individual has repaid and managed their debt.
• Allows the credit providers to share information on an individual’s account history.
• Allows credit providers to quicken the process of granting credit.
• Allows the credit providers to minimise their bad debt thus reducing the price of goods.

When an individual completes an application form the individual agrees to abide by the terms and conditions stipulated by the credit provider, which is that they will pay the agreed amount in full and on time. If the individual has lost his/her job it is important that they inform the credit provider of their situation and try to come to an agreement on the payment. All agreements must be put in writing. The credit provider is not obliged to change the terms of the original agreement but may do so in order to ultimately recover the full outstanding debt.

These companies are known as credit repair companies. The majority of them operate illegally. Credit Bureaus do not support any of these organisations and warn consumers not to use their services. It is important to remember that there is nothing that these credit repair companies can do that you could not do for yourself. They often take large repair up-front fees and do not deliver the promised results.

Debt counselling is a process which assists you in rescheduling and managing your debt. While the debt counsellor will contact your creditors, you remain responsible for your debt. Debt review is just another name for debt counselling.

A debt consolidator will repay all the businesses to whom you owe money, and you will then have to repay this one company. Be aware that sometimes the interest rate for this service is often higher, meaning you will have to repay more.