subject: A closer look at Credit Counseling [print this page] Are you finding it hard to manage several debts within your tight monthly budget? A large portion of your income goes into making your debt payments and you find it hard to make ends meet in the middle of the month. How you wish you could do something about it and enjoy a debt-free life. Well if this is what you are going through, then a credit counseling session may click in your favor.
Where to look for credit counseling?
Simply put, credit counseling refers to getting educated about how to avoid getting into debts that you possibly cannot pay off though any debt management option. Several debt relief companies offer credit counseling services as a part of their debt relief curriculum. Besides that, credit counseling is also offered online and on phone by individual credit counselors. You can enroll with any such company or go online to get a debt counseling done.
When you enroll for credit counseling, you are asked to attend a credit counseling session with the company's credit counselor. Here the counselor works on your debt issues by reviewing your debts and finances, suggests methods you can use to manage your debts, creates a budget for you, formulates a customized debt management plan and helps you learn ways to avoid debt.
What you should look for in a credit counselor?
A credit counselor has a key role to play in a successful credit counseling session. So, before you enroll for a credit counseling session, do take some time to evaluate the person who will be counseling you. Here are the things that you must check out:
Firstly, make sure the credit counselor is licensed to practice in your state.
Then, find out if the counselor is trained in consumer credit, debt and money management and budgeting, and is certified by relevant authorities or not. The counselor must have passed a third party counselor certification examination.
Finally, check with the Better Business Bureau and other pro-consumer groups if any consumer complaint is lodged against the counselor.
If your credit counselor meets all the criteria as stated above, then go ahead, otherwise look for some other reputable credit counselor in your state. Also do not expect legal advice from a credit counselor. Credit counselors are only trained to provide you with financial solutions; your legal queries are to be answered by legal practitioners only.
Credit Counseling and Credit Score
You can use credit counseling for a variety of services. Its impact on your credit score will depend on the combination of services that you opt for. If you use credit counseling simply to manage your debts and budget, then it will not affect your credit score. But if you use it for the purpose of debt negotiation, then your score is likely to get affected.
Advantages of Credit Counseling
There are several advantages of using credit counseling:
You learn about proper ways of budgeting and effective debt management plans.
You are relieved of creditor harassment.
Since your credit counselor tackles your creditors, you are spared the hassle of handling your debt issues directly.
Your interest rates are lowered and penalties are wiped off through debt negotiation by the counselor.
It paves way to a good credit score for you.
So, if all of that sounds promising and you have decided to go for a credit counseling session, then enroll with a reputable credit counselor and take your first smart step towards a secure future for yourself and your loved ones!
