Consumer Credit Counseling
Consumer credit counseling has become very common these days and you don’t have to wait for your debts to pile up to get advice from a credit counselor. Even if you are apprehending that your finances may take a backseat in near future, you can take help of a credit counselor.
Credit counseling-get your finances back on tracks
In consumer credit counseling, the debt counselor evaluates your overall financial situation. You can either attend a session in person or get help over the telephone or the net. A certified credit counselor evaluates your financial situation by reviewing your income, your debts and expenses. By assessing your financial condition, the credit counselor will recommend a debt help program that will suit your current financial stature best. It may be a debt consolidation program or a debt settlement program. Credit counseling is also a part of the debt management program or DMP. The new federal bankruptcy laws had made it mandatory for an individual intending to file bankruptcy to attend a credit counseling session at least 6 months prior to filing bankruptcy.
How does it help you?
A credit counselor will help you out in the following ways-
*Provide guidance in working out a budget so that you can manage your money effectively.
*A credit counselor will negotiate with your creditors so that your late fees are eliminated; your loan tenure is increased.
*They also help you by requesting creditors to lower the rate of interest.
In addition to suggesting appropriate methods to get out of debt, a credit counselor will also help you to get back your finances on tracks. You are also taught to manage your finances and debts more effectively in future should you face financial difficulties again.
A credit counseling session may take about an hour. However, it depends on your financial situation and the time varies from person to person depending on the requirement.
When you hire the services of a credit counseling agency, make sure that you are choosing the right agency. Reports suggest that the Better Business Bureau (BBB) has received a number of complaints against 3rd party debt counselors. Since last year the complaints have increased by 20%.
Credit counselors- beware of fraudsters
The consumer credit counseling complaints lodged with BBB are of 3 types-
*Some of the consumers complained that a company offering debt elimination promised to get debtors out of debt within a very short time span. However, debtors continued receiving threatening debt collection calls and when enquired, they found that debts had piled up even more.
*When you are being offered debt settlement or debt reduction program by a credit counselor, the credit counseling agency claims that they will work on your behalf and work out a solution. Complaints registered with the BBB stated that debtors stopped dealing with creditors once they were assured that the credit counseling agency will take the onus. However, in reality the agency had actually fled with the consumer’s money.
*When a company is offering debt consolidation, the company treats all your debts as a single account. There are several companies who charge exorbitant interest rates and fees and by the time you are debt free, you will have paid more than the original debt amount.
Consumer credit counseling has a positive side too and if you hit upon a good credit counselor, your finances can be back on tracks in no time.
Author’s Bio: Anthony Marx is one of the financial writers associated with the CreditMagic Community. With his in-depth knowledge and vast experience, he has laid a profound impact through writing and advising on all credit issues and has presented useful tips on credit repair, etc.. His remarkable guidance and support has improved the community into a global hub for the credit related situations. He is highly appreciated by the forum moderators and other authors of our community.