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Use Credit Counseling for Better Debt Management

If you can't manage your debt, ask for help. An expert can talk to you about taking control of your finances. Debt management services and specialists, which you can find both online and locally, look at your particular financial situation and offer methods of managing, restructuring, and ultimately paying off your debt. They will likely suggest such options as refinancing your home loan, taking out a low-interest home equity line of credit, applying for a debt consolidation loan, or repurposing funds that you have in other assets.

Credit is as simple or as complicated as you make it. You can rule your own credit, or you can easily get into a situation where credit rules you. Good credit makes home ownership possible, while bad credit can endanger your ability to finance a car or even just a new phone.

Do You Need Credit and Debt Counseling?

Do you need credit and debt counseling? Here are signs that you might need some assistance from debt management professionals.

  • Lots of Credit Cards? Do you have several debts from various creditors? You may need advice on consolidating debt and improving your spending habits. Don't be afraid to ask for help and find some solutions. You’ll simplify your life and your finances.
  • Turned Down? Have you been turned down for a car loan, a mortgage loan, or even a new phone? You need to find out why. You should analyze your credit report. Each of the three credit bureaus must give you a free copy of your report once a year, just for asking—you never need to buy your report or sign up for anything. Only an unnecessary middle man will try to sell you your credit report.
  • Missed Payments? Are you falling behind on your bills? That’s a sign of living beyond your means, and getting back on the right path takes discipline and organization. Debt counselors can help you sort this out.

Professional Credit Counseling

If your credit is suffering and you have no idea how to fix it, then you need professional credit counseling. The industry has been built to fulfil the needs of everyday consumers in situations like yours. Professional credit counselors know what to recommend for credit repair, and they know which habits and patterns to look for in helping you conquer debt.

Is it worth it to pay a professional credit counselor? Money is obviously tight already, but regaining your financial health is going to cost a little more money in the short term for the long-term results you want.

Your Benefits From Consumer Credit Counseling

If you are a good consumer, you may also be a great debtor. Young people often succumb to the consumer temptations in our culture and use credit cards for designer labels, cars they can't afford, and a lifestyle beyond their means. Before they realize it, they're in a debt hole.

If you can identify with this, consider seeking consumer credit counseling. Specialists in this field can help you alter your spending habits and formulate smart, long-term goals for repairing your credit and managing debt. It’s better to start early; don't wait until you are in trouble to call a consumer credit counseling agency.

Some consumer credit counseling is results based, meaning what you pay depends on some improvement in your situation. If they don't get you the promised results, you don’t pay. If they do succeed, the fee is small enough that it is worth paying for the benefits you see in financial responsibility and your credit score.

An often overlooked benefit of credit counseling is that professional credit counselors have the information, contacts, and processes to help you battle identity theft. They can eliminate any potential blemishes or long lasting effects on your credit. If your credit has been damaged through no fault of your own, a consumer credit counselor will be a great asset.

Finding a Consumer Credit Counseling Service

First, if you know someone who has had financial problems or has struggled with debt, ask if a consumer credit agency helped them. Referrals are a great way to start a valuable relationship with a credit counselor. You can also use the internet to search for a consumer credit counseling service. Confirm that they have no negative reviews on websites like BBB Online (Better Business Bureau Online).

If the main thrust of a credit counseling service is that they say they will negotiate for lower interest rates from your creditors, know that you can ask your creditors for this yourself. Just call them up and state the facts, no need for a middle man.

It’s critical to have confidence in the counseling service you select. Only 17 states have established guidelines for credit counseling companies and debt management services. In the remaining 33 states, the landscape is rocky, with no mandatory guidelines and many opportunities for scams. Ask family and friends for referrals. Also ask your accountant or financial advisor. Select a reputable company that you feel you can trust.

Senior Citizens. Seniors have different financial management concerns. Perhaps they are entering retirement or are learning to live on a fixed income. Consumer credit counseling specifically for senior citizens is available. The AARP has valuable resources. See what the AARP can offer by going to

Concerns About Credit and Debt Counseling Services

Consumer Affairs is a great source for advice on choosing consumer credit counseling companies (and they are all companies, in the business of making money, no matter how they try to look like a government agency or public service.) Avoid a credit counseling service that advertises on television, uses telemarketing, or sends spam emails. Be aware of the following.

  • A counseling service being “nonprofit” means nothing.
  • Do not give out any personal or financial information over the phone.
  • Beware of high fees or companies that keep your first month’s payment.
  • No one can erase or eliminate your debt. That language is a red flag. If an agency promises this, go to someone else.

The Better Business Bureau has these suggestions for how to choose a consumer credit counseling service.

  • All fees and services should be revealed up front. Compare costs from similar service providers to confirm that their costs are reasonable.
  • Ask if they provide services beyond debt management planning and debt consolidation loans.
  • Ask if you will receive a free counseling or budgeting session. Ask if they offer other free educational resources.
  • Find out the fee structure for any additional services. “It depends” is not an acceptable answer.
  • Is the consumer credit counseling service accredited through an independent third party?
  • Are the telephone counselors certified? If they are not certified, what kind of training have they received?