Is Credit Counseling The Right Choice For You?

Credit Counseling Solutions

If every peek at your credit card balance causes instant dread, or worse, even makes you wish you never looked in the first place, then you may be wondering if it’s time to call in the credit counselors. There’s nothing to be ashamed of, many of us have been in this exact situation.

In any case, there are a few things you must know before making a decision on if credit counseling is right for you.

The Credit Counselor’s Service

When looking in the direction of credit counseling, you’ll be researching agencies. Generally, these credit counseling agencies are considered nonprofit organizations, theoretically offering their services free of charge. A good agency will provide certified specialists. These specialists will offer advice tailored to your budgeting and money management predicament.

In most cases featuring series debt, counselors will suggest developing a personalized plan in which they act as a through way between you and your creditors. Rather than paying your creditors directly, you will provide the counselors a set monthly amount to pass through to your creditors. They will also attempt to negotiate lower interest rates, or perhaps even term extensions on your behalf.

Do Your Research

Outside of having a general idea of what credit counselors can offer, it’s important to know a few crucial points before going any further.

  • Before looking into any agencies, it’s key to have full knowledge of your financial situation and have all related information, such as credit card bills and anything related to household income. Any agency you choose will require it before proceeding further.
  • Good counseling agencies will be geared toward helping their clients understand how they got into their dire situations in the first place. They may even other workshops.
  • While these agencies are technically nonprofit, when utilizing their personalized debt management plans they will charge fees which are not applied to the debt reduction itself.
  • Creditors may not necessarily agree to work with these agencies in every situation.

Beyond understanding the services and how credit counseling operates, it is even more important to pay close attention to which agency you may select. Beverly Harzog, credit expert and author of The Debt Escape Plan suggests not to bother with any agency who will not provide information freely, or who want money prior to a consultation.

Herzog also states that The Federal Trade Commission has warned “nonprofit” doesn’t mean any such described establishment is legitimate, let alone free or affordable.

In order to circumvent much of the risk of running into unsavory business’ posing as credit counseling agencies, The Balance suggests checking with the Better Business Bureau, the local consumer protection agency, as well as the National Foundation for Credit Counseling in regards to the legitimacy of counseling agencies.

Think Twice Before You Act

Duking it out with creditors isn’t fun, but when the situation calls for it, then it must be done by someone. This someone could be you. Even though Credit Counselors offer personalized payment plans, and it’s hard to face debt in the face, it may be in your best interest to opt for the counselors’ workshops over their payment plans.

For those who are overwhelmed by their piling debt, it may seem like the only option, however, it’s certainly not as empowering as learning how to manage your situation and handling it on your own to the bitter end. Whatever the case may be, as long as you’ve selected a reputable agency, and you’re ready to move forward to a debt free life, there is no doubt that credit counseling can be beneficial to anyone in need of debt relief.

Real Time Web Analytics