Do Credit Management Services Basically Equal Babysitting?

Credit management services offer subscriptions to consumers who want to keep tabs on their credit scores and watch for identity theft, but many people fear this access takes away an individual's financial freedom. Some credit management services are simple online services offering monthly updates. Others, though, offer hands-on guidance regarding proper financial decisions and credit repair. If you are considering a credit management service, be prepared to expect a degree of watch-fullness over your financial decisions.

Advice on Debt and Loans

If you elect to go with an online credit watch service, you will not receive advice prior to seeking loans or going into debt. However, the hands-on agencies will be involved with these decisions. You are paying these credit & debt management services to guide your decisions in order to ensure your best credit. This means they will help you choose the terms of new loans and debt repayment. At times, the advice of the management company will conflict with your personal desires. You maintain financial freedom to make any choice you elect; but, if you do not follow their advice, then you do not gain the benefits they promise. If you need to enter negotiations, consumer credit counseling services may form a stronger contract insisting you take certain actions.

Updates and Reports on Credit Scores

Both heavily-involved services and those with lesser involvement will send regular updates regarding your credit score and financial position. If you are late on a payment, are carrying too much debt or close a credit card, the company will notify you and show you exactly how this has affected your credit score. Suggestions will be made to assist you in overcoming any challenges and rebuild your credit after a financial mishap.

Eyes on Savings and Assets

Your credit score is not just about debt and missed or made payments. The proportion of debt to assets you hold is important in gauging your financial stability. Credit management companies will spend time advising you on how to effectively get this ratio in a positive position. The percentage of your total credit used is additionally important. You should maintain a balance under 10% of your total available credit. Management companies watch this percentage very closely and show you when it is time to pay down some debt. Again, you may have a difference of opinion with the company. In most cases, you maintain your financial freedom.

Personal Information in the Hands of Others

Perhaps the most uncomfortable portion of using a credit management company is allowing them to access your personal information. You will immediately be required to provide a look at your complete financial history. Further, you will give them the ability to look at your decisions going forward. The result is very much like having a babysitter; you will feel a watchful eye over your shoulder. It is up to you the level of involvement you elect with your credit management agency. If this makes you uncomfortable, elect an online credit watch service that is much less intrusive.