How to Choose a Consumer Credit Counseling Service

Consumer credit counseling is non-profit debt consolidation services that are expert in debt management and repayment. Credit counseling agencies offer services like debt management, bankruptcy consulting and other credit help services. They help an individual not only to get out of debt situation, but also to educate them on how to stay out of debt.

Credit counseling agencies offer services through local offices, online, or over the phone. A reputable credit counseling agency can help you stop collection calls from creditors as well as lower interest charges and monthly payments. Some credit counselors can help you have your debt paid off in three to five years.

How Consumer Credit Counseling Services Work

A debt counselor will spend time with you analyzing your financial situation — assets, earnings and ability to pay. They then help you create a plan that helps you to pay without causing other bills to fall behind. If you can’t make even the minimum payments, however, chances are they’ll suggest you to enroll in a debt management plan or program (DMP).

If you enroll in a debt management program, the counselor will negotiate with your creditors, on your behalf, to get lower interest rates and monthly payments. Once negotiations are complete they will decide your total monthly payment and length of time it will take to pay everything off.

If you agree to the plan, they will then consolidate all bills into a single debt and you start making an affordable single payment each month to the agency. The counselor then forwards the proper amount to each creditor according to a monthly plan. Fees may be added to the payment, or they may come out of the amount you’re paying your creditors.

Reputable Credit Counseling Service

If you’re behind on your debts consider getting help from a reputable consumer credit counseling agency before things spiral out of control. A reputable company has many certified counselors that can help you out in reducing debt and improving your creditworthiness.

As these companies have many ways to make money, ask them how they get paid. Make sure you know any fees up front and the percentage of your payments is going to your creditors. Also, be sure you can still save some money from the program after you paid the company.

So when choosing a consumer credit counseling agency, always research these companies before you decide to sign on with any of them. Make sure you work with a reputable debt counselor that spends time getting to know your needs before they offer you a debt management plan.

How to Choose a Consumer Credit Counseling Service was last modified: April 9th, 2014 by Paul Sarwana
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