Best Credit Counseling: How to Find Quality Services
Addressing debt is not something that many people look forward to doing. When faced with deciding between continuing to struggle to pay your creditors and placing trust in an organization to deliver on its promises of debt relief, it can be difficult to make a move with surety. Credit counseling in most cases offers a risk-free, trustworthy way to receive personalized financial advice. The best credit counseling can identify multiple solutions for your situation and goals and empower you to make forward progress.
If you’re struggling with debt and looking for help managing your finances, credit counseling services can be a valuable resource. Here are some tips to help you find the best credit counseling services:
- Look for a non-profit organization: Non-profit credit counseling agencies typically offer free or low-cost services and are less likely to be motivated by profits than for-profit agencies.
- Check for accreditation: Look for a credit counseling agency that is accredited by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA). These organizations require agencies to meet certain standards and provide quality services.
- Research online: Read reviews and check ratings on the Better Business Bureau website or other online directories to find reputable credit counseling services.
- Ask for recommendations: Talk to friends and family members who have used credit counseling services in the past to get their recommendations.
- Check the services offered: Make sure the credit counseling agency offers services that meet your needs, such as debt management plans, budgeting assistance, or financial education.
By following these tips, you can find a credit counseling agency that can help you manage your finances and get back on track financially. Let’s examine what credit counseling is and when it should be considered an effective tool for dealing with debt problems, as well as some of the specific services that quality credit counseling organizations provide.
What Is Credit Counseling and What Is Its Purpose?
Credit counseling is a free service offered through nonprofit agencies whose core mission is to create access to financial education. Not indicated by its name, credit counseling can include assessing income compared to spending, identifying and clarifying past debt history as well as other instances of borrowing, and formulating ideas for general financial improvement.
The purpose of credit counseling is to understand a client’s debt and credit-related goals and their ability to achieve those goals on their own. Should the client need additional resources or support, a credit counselor is able to discuss the pitfalls or benefits of each.
The best credit counseling serves as more than just a one-time financial fix. Its holistic approach seeks to address the cause of burdens and build self-sufficiency within the household being counseled. Nonprofits that provide credit counseling, such as Money Fit, are passionate about arming their clients with the know-how to lead a life free from debt and other financial worries. Working alongside their clients, they ensure a future filled with hope.
When Should You Consider Credit Counseling?
Many debts or credit issues can be resolved in a do-it-yourself fashion. These circumstances may include:
Negotiating a repayment plan with creditors
Paying off a thousand dollars or less in debt
Arranging debt consolidation through a personal loan or balance transfer card
Repairing poor credit over time
Those who feel stuck living paycheck to paycheck and face ballooning credit or loan balances, collection attempts, burdensome medical debt, or are on the brink of bankruptcy only stand to benefit from meeting with a credit counselor to discuss options.
No matter how large or small your debt is if you are feeling overwhelmed, you can find guidance, clarity, and peace through credit counseling services. Seeking help may be especially beneficial if you find yourself in one of the following situations:
You have over $1,000 in one or more forms of unsecured debt
Your monthly payments are becoming unaffordable
You are stressed from being contacted by collection agencies
Late fees and increasing interest have resulted in insurmountable balances
You struggle to break your dependency on credit
A poor credit score has impacted your financial opportunities
What Services Do the Best Credit Counseling Agencies Offer?
If you schedule an appointment for credit counseling, you can expect to spend much of your time detailing your debt, the factors that contributed to it, and the options you have to make debt repayment more comfortable.
If it is reasonably difficult to manage your debt on your own, your counselor may offer information on the benefits of enrolling in a nonprofit debt management program. This is a form of structured repayment that leads consumers through repaying their creditors in full while saving money in interest and fees. The time spent in debt is also significantly reduced.
If you are looking for financial guidance beyond debt, many credit counseling agencies strive to offer other resources including the following:
During this session, your credit counselor will review your income and spending. They will help you find ways to cut expenses in order to eliminate your reliance on credit and free up money to pay your current debt. If your debt is under control, your counselor may suggest strategies for building short and long-term savings.
Credit Report Analysis
Whether debt has impacted your credit for the worse, or you are just looking to tune up your score for future borrowing, a credit report analysis can help. During this consultation, your credit counselor will review your report for errors, discuss how much each instance of borrowing has affected your credit profile, and suggest ways lenders might want to see you improve (i.e. reducing utilization or seeking credit diversity).
If you have suffered extreme hardship such as extended unemployment, health problems, divorce, or loss of a spouse, your options to rehabilitate your finances may be limited. Credit counseling can be the first step in determining if you should file for bankruptcy. If you decide this is best, you will need to complete two sessions of bankruptcy counseling. Your counselor will be able to detail what to expect from the law offices handling your case, what fees and paperwork will be required, and possible ways to avoid filing for bankruptcy in the future.
How Can Credit Counseling Help You?
If you feel stuck between a hard place and a rock and don’t know what to do about your debt, credit counseling can offer a listening ear and a helping hand. You’ll be given the opportunity to unload your stress and voice the concerns you’ve previously battled alone.
Your credit counselor will then be able to clarify your options and assist you in building a plan for financial freedom. Once you’ve completed your consultation, you can feel relieved knowing that you now have an advocate to stand between you and your creditors.
If you choose to enroll in a debt management program, your credit counselor will work to reduce your interest rates, have late fees dropped, and put an end to collection attempts.
In the case that credit counseling cannot help your situation, consulting with a credit counselor can still inform you of other ways to lift your financial burden.
How to Get Started
By doing your research and following the tips outlined earlier, you can find a credit counseling agency that can help you manage your finances and get back on track financially.
It’s important to keep in mind that credit counseling services are not a one-size-fits-all solution. The best credit counseling agencies will work with you to develop a personalized plan that meets your specific needs and financial goals. This may include creating a budget, developing a debt management plan, or providing financial education and resources.
Working with a credit counseling agency can be a valuable investment in your financial future, but it’s important to be cautious of scams and organizations that charge exorbitant fees for their services. Choosing a non-profit organization that is accredited by the NFCC or FCAA can provide added peace of mind that you’re working with a reputable and trustworthy organization.
Overall, taking the time to research and find a quality credit counseling organization can provide the support and resources you need to improve your financial situation and work towards a brighter financial future.