An Overview on Credit Counseling

If you are looking for help to resolve a bad debt situation, professional credit counseling can be the answer. But with so many agencies offering debt relief services in the market, how can you find a trust-worthy credit counselling organization? What can you expect from a credit counselling session?

A Closer Look at Your Personal Finances

A real credit counsellor would never advice without proper assessment of the client’s background. Of course, people who need credit counselling are confronted with different problems. Thus, in order to find the best solution, a counsellor must get to know the root of the problem.

For instance, some people may need advice on how they can keep up with their loan payments while others might be battling with credit card debt. Some consumers might be struggling with a gambling addiction while others might be facing bad debt as a result of unfortunate circumstances like an unexpected loss of job, a failed business, divorce, or illness.

Watch out for credit counsellors who may urge you to enrol in a Debt Management Program or to apply for a Debt Consolidation Loan without first evaluating your financial situation. A counsellor would need to look into the client’s credit report to determine the problem and conduct a one-on-one interview which can last for an hour to a few hours, depending on the depth of the problem.

Helping You Create a Budget Plan that Works

A legitimate credit counsellor will not only recommend debt consolidation but will also help you create an efficient and doable budget plan suited to your situation. The plan will include setting the right financial goals, managing your household and personal expenses, prioritizing debt repayment, and building-up your personal savings.

Help Your Execute the Plan

After evaluating your financial situation and creating the plan, a trusted credit counsellor must guide you on executing the plan, all the way through debt recovery. You may be required to attend regular credit counselling sessions to make sure that you are keeping up with your goals.

For instance, if you can encounter difficulties in keeping up with your repayment, your credit counsellor can give you the much-needed encouragement and guidance, especially during the first few months of the credit rehabilitation program.

Credibility and Reputation

Before signing up for a credit counseling service, make sure that the agency is registered with the two major credit counselling organizations – The National Foundation for Credit Counseling (http://www.nfcc.org/) and the Association of Independent Credit Counseling Agencies (http://www.aiccca.org/). Also, check if the agency is in good standing with the Better Business Bureau (BBB).

 

About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010
 

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