A Deeper Look At Credit Counseling

What is Credit Counseling?

credit counselCredit counseling is one alternative solution for those who are looking to fix credit problems. Think of it like consulting a doctor for a medical issue — you need to know how to get better and seek an expert opinion for guidance. It’s the same concept, and it’s got some serious benefits.

Essentially, credit counseling is a consultation about your debt and how to manage it. Though it has benefits for those who can really use it, it can also cause a lot of trouble if it’s not the right option for you. It’s important to be aware of whether or not it makes sense for your financial situation to pursue counseling.

Who To Trust 

When looking for credit counselors and deciding whether it’s the right option for you, it’s important to look for certain tell-tale signs that you’re potentially being scammed and avoid that company at all costs. For example, when someone makes big promises that seem too good to be true you should avoid that completely — especially when they try to scam you out of money to fulfill those big promises. Particularly, don’t get involved with debt settlement and credit repair agencies.

A simple way to ensure that you’re using a legitimate credit counseling agency is to first check that they’re accredited by the National Foundation For Credit Counseling, and then search the business’ name in the Better Business Bureau. Another thing to keep in mind is that credit counseling agencies typically have a nonprofit status, but that doesn’t always mean they’re legitimate and trustworthy. 

Credit Counseling And Getting Married

Credit counseling is something to consider when you’re getting married, particularly because you want to assess your individual finances and examine how responsible you are with repayment, closing loans and maintaining your loan accounts. While marriage itself has no effect on your credit score, one spouse having a bad credit score can impact the ability for both spouses to take out loans, buy cars and houses and make other financial decisions.

Because of how difficult it is to live without credit in today’s world, it’s important that one spouse has a good credit score — and it might be wise to keep the loans separate. If one person is particularly bad about repaying loans, having another who is more responsible and has a good score as a result can be beneficial for both in the long run.

Seeking credit counseling to assess your financial situation before and during your marriage is smart, as finances are the biggest reason for marriages ending. It’s also important to remain transparent about your financial situation and never try to hide anything from your partner. 

Things To Keep In Mind 

When pursuing credit counseling, it’s important to understand that you will no longer have access to credit. If you proceed with a debt management plan, your credit counselor will have you close your accounts and help you work out a repayment option that allows you to pay back your debt in a timely manner — without the risk of using it any further.

If you understand the risks and benefits involved in credit counseling, it just might be the option for you. Make sure to do your research before you jump in, and you could be setting yourself up on the right path towards getting your head above financial water.

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