Struggling with debt? Tired of collection calls and sleepless nights? Confused with debt relief options to choose from, to regain your lost financial freedom?
Finding the right debt relief plan according to your financial situation can be tricky and challenging, as each option looks and sounds promising. This is when you should consider credit counseling.
What is Credit Counseling?
Credit counseling is a professional counseling service offered to help borrowers manage their finances in situations when they are not able to do it on their own. It is a service wherein qualified and certified credit counselors assist borrowers with smart credit management tips and provide valuable suggestions to manage finances effectively.
When to Opt for Credit Counseling?
Credit counseling may be the best option for you in situations where:
- You face difficulty in making debt payments
- Have problems in figuring out your total outstanding debt amount
- It is becoming difficult for you to manage multiple card payments
- Creditors are not increasing your credit card limit
- You are thinking of getting payday loans
- You find it difficult to pay off payday loans
- Creditors are calling you up for payments
- You are confused regarding which debt relief program to choose from
- You are curious to know how to pay off unsecured debts like medical bills, payday loans, credit card debts and utility bills
How Does Credit Counseling Work?
It’s easy to get credit, but paying it off in a timely manner is not as simple, largely because of the high interest monthly payments that you have to make to several lenders that you have taken credit from. In addition, missing or late payments not only hurt your credibility and credit score in the market, but also make it more difficult to qualify for a loan or credit in the long run.
When you seek professional help, you can rest assured that credit counselors will review your situation thoroughly, to sort it out and help you get back on track.
Once you approach a credit counselor, the counselor will first analyze your total financial situation. This analysis will help you work out and create a money management plan along with a debt payment down plan. Furthermore, your credit counselor may also provide you with free resources and sometimes even money management workshops.
To help the credit counselor devise a proper money management plan for you, it is extremely important that you be honest and up front about your financial situation; such as, providing the counselor with correct information including what you owe, your monthly income and expenses.
Impact of Credit Counseling on Your Credit Score
When considering credit counseling services, many often wonder about its impact on their credit score. Well, the truth of the matter is that consultancy does not impact your credit score in any way. Simply meeting the counselor and getting a debt repayment plan worked out will not impact your score.
But please note, the actions you will take as a result of the credit counseling, can affect your score in the short run. For example, in many cases, a debt management plan involves closing credit accounts as you pay each one off. This activity can hurt your score, but on the other hand, it is necessary if you have had problems with excess debt and spending.
How to Find a Legitimate Credit Counseling Agency?
If you are having problems managing your credit and are looking for professional assistance, then first make sure that the credit counseling service you are considering; is legitimate. This will help you avoid a scam and prevent wastage of your time, money and energy with an inexperienced company.
Also, it will help you watch out for unscrupulous agents, who are just in the business to increase their financial bottom line; by asking for a huge registration fee, touting their services as being the best alternatives to bankruptcy, and often surprising you unpleasantly with additional charges during the process.
So, to escape such fraudulent services and to find a legitimate credit counseling agency to work with, take your time and look for an agency that:
- Is licensed to operate in your state
- Has certified counselors
- I s a government approved organization, particularly if you are looking for bankruptcy counseling
- Will give you a written agreement when you enroll in their debt management plan
- Will provide you with educational material and valuable resources for guidance purposes
In addition to this, you can reconfirm about the agency by checking with the BBB (Better Business Bureau) and the state’s consumer protection agency. You can also check with the National Foundation for Credit Counseling or view a list of approved credit counselors from the US Trustee Program.
Remember that by making an informed decision and working with a reliable counseling company, you can overcome your debt management problems easily without any unpleasant surprises during the process and gain back your lost financial position.
Credit counseling, is perhaps the best way for those struggling with debt and have little knowledge on how to manage expenses and pay off the creditors on time. Credit counseling helps borrowers/debtors develop spending plans for better money management, set realistic financial goals, develop skills and plans to pay off accumulated debt quickly and become debt free in the fastest time.
For more information on credit counseling or assistance with debt management, get in touch with us today. We have a team of experienced debt consultants who can provide you with valuable guidance on which debt relief option would suit your situation the best.