If you've gotten to a point when your bad credit load has become too much to bear, you're probably finding yourself drawn to credit repair claims. It seems like everywhere you turn there are legions of credit repair companies ready to reduce your debt and boost your poor credit score.

As you might expect, not all of these companies are what they claim to be. Many credit counseling companies can leave you in an even worse poor credit situation - after they've collected their fees.

Ravi Shahani, a credit counselor with Consumer Credit Counseling, offers up the following description of a reputable consumer credit counseling company: "A non-profit organization that wants to financially empower its clients and help them gain control of their life through education and financial management." Some of which will offer credit card deals.

These companies will teach and provide information to you on managing your money and your debts, help you develop a budget, and generally provide you with free educational materials and workshops to help bad credit.

They have counselors who are trained in consumer credit, money and debt management, and budgeting. If they are legitimate these organizations will be happy to send you free information about themselves and provide any information you might need to improve poor credit.

Shahani describes a typical case. "A person calls in and tells us they have too much debt," he says. "We then analyze their situation and provide free budget counseling. If they are in poor credit shape with creditors, we may offer debt management."

Shahani notes that if a client chooses debt management, they will be charged both an application and monthly service fee. If you're talking to a credit counselor, steer clear of the ones who want to charge you for analysis, or push a Debt Management Plan on you.

Can You Make It. If your credit is out of control, a credit counselor may suggest a Debt Management Plan (DMP). This is a plan that is an arrangement between you, your creditors and the credit counselors. Through the DMP, you will deposit money each month with your credit counselors.

Then they will use that money to pay your debts based on a schedule with the creditors, who may have agreed to lower your interest rates or waive certain fees in the hopes of recouping some of their money.

DMPs can be effective, but generally are stretched out. By adhering to the payment schedule, you could find yourself debt-free by the end of the repayment period.

However, you may find that part of the deal is that you cannot acquire new credit card deals while you're cleaning up. A DMP is generally the last resort for a credit counselor, and if they are truly reputable, it will have a budget as well as advice on sound money management.

If you pursue a DMP, make sure you know which of your creditors are involved with it. You'll still have to pay anyone that is not participating. The good companies understand they'll be paid over time, and that only by making regular payments will your poor credit score begin to reverse itself.

Beware: Debt Negotiation Programs. Everyone knows that nothing is free. Remember that as you begin to investigate Debt Negotiation or Debt Settlement Programs. Firms that claim that they can arrange to significantly reduce the balance of your poor credit debt, as well as remove all the bad areas from your credit report, relentlessly push these programs.

How do they operate? They tell you to stop paying your creditors. (Of course, they will be charging you a bunch of upfront fees.) After you've gone late on many payments, they will then contact your creditors and attempt to have your debt determined to be uncollectible.

That's how you wind up getting your balance reduced. Unfortunately, your credit score will be shot and the IRS will consider the principal that got wiped off the books to be income. These are not credit card deals.

But do these people improve your bad credit? They tend to use a shotgun approach, disputing everything in your report. In response to the disputes, the credit reporting agencies will remove all disputed items temporarily while they look into things. At that point, these supposed helpers will send you your supposed clean good credit history reports.

Once the credit bureaus do finish their investigations and verify that the negative information is correct, they promptly replace the negative information. The effect is you are left with the same bad credit you had before. After this your credit-counselors will have pocketed your fees and will become busy not returning your calls.

Know What You Are Getting Into. A credit counselor can be a big help, you need to be realistic about what they can do. Expect them to guide you toward a lengthy, disciplined process for getting your finances in order with credit card deals. You should only work with ones that check out with the Better Business Bureau. If you're being pushed into a DMP or Debt Negotiation, move on to the next credit counselor.

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