It is possible to address the situation that you find yourself in by yourself and without the need of credit counseling. You can cut back on the expenses and put money aside for saving and start to pay down debt. But it is not easy and you could find yourself struggling but it might be that having a counseling session might benefit you and help with your mounting debt problem.
Finding the Right Credit Counselling Agency
They will need to look at what money that you have coming in and the basic expenditure that you have each month and then they need to look at the debt too. From this the debt counselor can work out a budget and a debt management plan that will work for you. Those that are great at their job can make you avoid getting back into debt in the future.
Make sure that the credit counselor is right for you and will meet your needs.
- Check that they have a license.
- They understand how they can help you.
- Check that there are no complaints lodged against them.
Credit Counseling and Credit Score
It is important to remember that if you go to a counselor and ask advice and they write you a budget plan and a debt management plan this won’t affect your credit report. But if you then agree to them discussing with your creditors to negotiate different terms this will get recorded and will have a temporary negative affect on your credit file.
- Budget you money.
- Manage debt that you have struggled with.
- End the harassment that creditors often subject their clients too.
- Hopefully lowered interest rates and payments.
- Improving the credit score.
Credit Card Debt
If credit card debt is taking over your life then you need to stop using the card and making the situation worse. You need to have a complete picture of the debt that you owe with the highest interest rate at the top and a list of the income that you have coming in, knowing a basic budget that you spend each month will give you a picture of your financial status and what you could do to repair that damage.
If you approach the credit card companies and ask for a reduction and they refuse it is a good idea to ask to speak to a supervisor as you might get a better offer. Remember to write down the outline of the conversation and the names of the people that you are speaking to, both first and second name, and the date and time. They might have recorded the conversation, but it if ever comes into question then at least you can give them the times, date and name of the person involved in the conversation.
If you are seeking credit counseling it is a good idea that you check the person that is going to help you. Sometimes the information is not as great as it could be and this can affect the performance that you will experience. If they have great knowledge and this should be evident in their ability to understand the full situation that you have found yourself in. There are not just there to offer you a budget, but they are there to talk about the reasons why you are in this situation and they are there to help you address and overcome the stress that develops when you are faced with large debts and creditors. It can become distressing when they demand money that you haven’t got. They should offer you advise as to the best solution for you. It could be that you are the best person to deal with the debt, or they might suggest a debt management program or suggest that it is too far gone to be rescued and your only option is bankruptcy.
Debt Management Plan
These plans can be completed in 1 to 5 years and they are designed so that you will be completely debt free at the end of the time frame. They are able to talk to your creditors for you and they have the experience to deal with these companies and can often get a reduction in the interest and the late payment fees that are on the account. Just this, if done correctly, can save you many hundreds of dollars in interest alone.
There are some credit counseling services that do not meet the required standard and can leave you in a worse financial situation, so it is vital that before you sign on to any plan that you are able to check out the company that you are thinking about to represent you with your creditors.
- Make sure that you get references and that you check them out.
- Make sure that you chose a non-profit counselor.
- Make sure they tell you all the fees and charges before you start.