14
QuizMultiple Choice

Debt Management

Question 14 • [PERFIN] Personal Finance, Sem 2 (26-27)

A warning sign that a credit counseling agency may not be legitimate is when they promise to _____.

Answer
A
work with creditors to come up with a reasonable payment plan for paying off debt
B
help lower the monthly payments you must make to your creditors
C
pay off your debts by lowering the interest rate that you pay on them
D
settle your debts without it hurting your credit rating

Explanation

Debt settlement can negatively affect your credit, so an agency cannot reliably promise to settle your debts without harming your credit rating. That guarantee is a warning sign. Working with creditors to arrange payments or seeking lower payments or interest rates can be legitimate counseling services.

AI-written and checked against the verified answer.

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