Debt problems can sneak up on you. Perhaps credit card debt has gotten out of control or an emergency came up that you were unprepared to deal with. There are many consumer consumer credit counseling services cccs that offer help for those unable to handle their debt problems on their own.
Non-profit credit counseling services, such as the National Foundation for Consumer Credit (NFCC), help many consumers who are having financial difficulty meeting their financial obligations. They provide services that include counseling, credit education, and budgeting and debt consolidation.
How To Choose A Consumer Credit Counseling Service
Many consumers are nervous about putting all their personal financial information out for scrutiny. How can you know if a service is trustworthy?
You should take your time and make your choice based on several criteria. You want to choose a reputable agency that is affiliated with a national association, such as the NFCC. Before you give out any information about yourself, make sure you know everything about a company. Check for licenses, certifications, affiliations and any complaints registered with the Better Business Bureau.
Meet with the counseling services you are considering for an interview. Ask about the services they provide. You will need to know what plan of action they would take for you. Don’t sign any paperwork or give your Social Security Numbers until you have reviewed all the terms thoroughly. It is suggested that you take the papers home and think them over before signing anything.
The counselor you meet with should be open, non-judgmental and easy to talk with. You are looking for privacy and discreet advice. You should be able to answer questions and ask them.
Credit counseling fees vary, but when you are using a well reputed agency, you can expect little or no cost. Non-profit agencies should be exactly that – non profit. They aren’t working for your money, they are working for you. If the cost or fees seem extreme, you should look for another agency. You can’t get out of debt if you are increasing your spending.
What To Expect From A Counseling Service
You should be taken into a private area to discuss your finances. Be prepared for your first detailed discussion by having all of your debt and income information with you. It is also a good idea to obtain your online credit report and scores. Depending on your debt situation, you may have forgot about an old account, so this is a good way to double check that there are no further outstanding accounts that you may have. The agency will advise you on what you need to bring with you. Your counselor should help you in planning a budget that covers both your living expenses and payments to creditors.
Most counseling services begin with debt management to pay down your debt. The counselor will negotiate with your lender for lower rates and the forgiveness of fees. If this isn’t enough to put your repayment on a steady path, you may be advised to consolidate your debt.
When you consolidate your debt through a credit counseling service, you are usually consolidating all of your monthly debt payments into one payment made to the service agency. The agency in return pays each creditor monthly.
In debt consolidation, your credit cards will be closed. You will not be allowed to apply for or acquire additional debt until you complete the program. Your participation in a credit counseling program may or may not be recorded in your credit report.
Don’t expect everything to automatically be fixed. Any negative credit issues you have will remain on your credit report for up to seven years, sometimes longer. Creditors are known for noting on your account that you are in financial counseling. The counselor will help you gain control of your finances, but cannot magically fix your spending.
The most important thing in entering credit counseling and debt consolidation is to make your choices wisely. Don’t opt for the easy way out, it can cost you more than you realize. There is no easy way out, but with credit counseling services, you can become financially stable and debt free.
About the Author
Linda Meadley is very knowledgeable in the field of credit. Throughout her 20 year career she has worked as a mortgage and loans office, credit manager and financial advisor, assisting consumers in their financial endeavors. Her website is packed with great information and tips, including how to obtain totally free online credit reports and her recent book on debt elimination is helping millions of people take control of their financial future. Copyright