What Is Credit Counseling?
Credit counseling is a process in which you work with a credit counselor to develop a plan for managing your finances. The end goal is to improve your financial situation, supported by instilling better financial habits you can apply in the future.
How that happens can depend on what type of Best Credit Counseling Agency you need. For example and its member agencies offer these services:
Debt management plans
Student loan counseling
Financial coaching for small business owners
Credit report reviews
Homeownership counseling
Reverse mortgage counseling
Foreclosure prevention
Bankruptcy counseling
Credit counselors can also help you to develop a realistic budget, if that’s something you’re struggling with. The solutions offered through credit counseling services can be tailored to your situation and needs.
How Credit Counseling Works
Credit counseling is designed to help you create a game plan for managing your finances. This involves having a credit counselor look over your finances and use their expertise to help you create a strategic plan.
The kind of help you can get through credit counseling services will vary, depending on the agency. The member agencies of the, for example, can help you:
Eliminate late fees and over limit charges
Stop collection calls
Lower your interest rates
Consolidate bills into a single monthly payment
Pay off debt faster
Improve money habits
Credit counseling is designed to be personal, not one size fits all. So, if you’re meeting with a credit counselor, you should be walking away with a plan that fits you specifically.
How to Choose the Right Credit Counselor for You
Credit counseling services aren’t identical, and it’s important to do some research beforehand when choosing a credit counseling agency. The first thing to consider is whether you should work with a nonprofit or for-profit credit counselor.
Nonprofit vs. For-Profit Credit Counseling
Nonprofit credit counselors charge no or minimal fees for their services. The certifies nonprofit credit counselors and typically recommends that consumers choose nonprofit Best Credit Counseling Agency.
For-profit credit counseling agencies can charge fees for their services. Examples of for-profit credit counseling include debt settlement companies, debt relief companies and companies that offer credit repair services.
If you don’t want to pay fees for credit counseling and you want reassurance that you’re working with a reputable company, a nonprofit credit counselor is likely the better fit. With for-profit credit counseling services, you have to be aware of the potential for scams.