Many who are deep in debt struggle to find answers to their financial questions:
- “How do I manage my money in the future?”
- “What should I do to improve my credit?”
- “Is bankruptcy my only option?”
- “Are there more resources out there that can lessen my financial burdens?”
Fortunately, your debt relief options include speaking with a credit counselor, who can provide you with financial insight and recommendations on how to proceed with paying back your debts.
What is Credit Counseling?
The ultimate goal of credit counseling is to provide individuals with advice and resources on how to gain control over their finances. With the help of a credit counselor, those seeking credit counseling will review their current financial situation, discuss any concerns, and implement strategies to achieve their money goals. Credit counselors use a variety of tactics to help their clients, including budgeting tools, debt counseling and debt management plans.
How Does Credit Counseling Work?
You should expect your first credit counseling session to be somewhere between 30 and 60 minutes long. You’ll discuss a variety of financial topics, so it’s best to have the following information ready:
- All current credit information, including the debt balances, interest rates and due dates
- Your total monthly income, including the amount withheld and your total take home pay
- Loan terms, monthly payments and interest rates for any loans and mortgages
- Estimated monthly expenses, including utility bills, your average grocery bill, insurance payments and subscriptions.
In addition to bringing copies of your creditor statements and collection letters, be prepared to answer any questions about your current budgeting and spending habits.
After reviewing your financial information, your counselor will determine if there is anything that can be taken care of immediately with the help of budgeting and changing spending habits. A debt management program may also be suggested, which involves your counselor contacting debtors on your behalf to attempt to extend your terms and negotiate lower monthly payments.
How Do I Find a Consumer Credit Counselor?
There are a variety of credit counseling programs to choose from, including those offered through the following:
- Credit Unions
- Military Bases
- Consumer Protection Agencies
When researching your credit counseling options, it’s important to work with a trusted group. Look for credit counselors who are members of the American Fair Credit Council (AFCC) or the National Foundation for Credit Counseling (NFCC), as they adhere to strict standards and regular audits. You should also check to see that your credit counselor is in good standing with the Better Business Bureau.
Reputable credit counselors will be transparent with their costs, so it’s wise to avoid organizations that charge you an upfront fee before providing you with any information. Credit counselors should also be willing to work with you no matter the size of your debt, as they’re meant to be a trusted resource and financial advocate.
Are Credit Counseling Services Right for Me?
Credit counseling isn’t restricted to those who are already drowning in debt; if you are interested in planning ahead for financial success, a credit counselor can provide you with more information and answer any financial questions you may have. Whether you’ve just received your first credit card, want some budgeting guidance, are just beginning to struggle with card payments or are handling more debt than you can manage, credit counselors can assist you and point you in the right direction.
It’s important to remember that although credit counseling services can work with creditors to reduce your monthly payments, they can’t reduce the total amount of debt that you owe. If you’re looking for ways to negotiate with creditors and reduce your overall debt, you may instead seek help from a debt settlement company.
Accredited Debt Relief provides debt settlement options to individuals throughout the U.S., and is often able to reduce the total amount of debt that their customers owe, which helps them pay off their debts quicker. Contact us to learn more and receive your free, no obligation consultation.