What can you expect from credit counseling services, and why should you use them? These are questions often asked by people who have financial worries.
Debt can be a massive burden on many individuals and families. In these difficult economic times, many people have taken on more financial commitments than they can handle. Added to that, there may be job losses or periods of ill health with reduced income.
A lot of people choose to ignore financial difficulties at first, hoping the problem will go away. But it is rare for anybody to have the lottery win or unexpected inheritance that they dream of. Financial problems are not so easily solved. It takes determination and planning to get out of debt, and that is where credit counseling services can help us.
Many people have a resistance to the idea of asking for help, especially in relation to financial matters. They do not want to admit they have a problem, and they may not like the idea of sharing information about their financial situation with a stranger. This is understandable.
Nevertheless, one of the first steps in debt management is admitting you have a problem to yourself and to somebody else. It is like most other issues in that respect. Looking at the problem clearly and honestly, with somebody to advise you, is vital if you want to solve it.
You should have no doubts about being able to trust your counselor. Credit counseling services should always have a privacy and confidentiality policy that you will be able to see before you commit to their service. Anything you tell them should be private between you and the counselor, unless you agree that they can use some of the information in any letters that they write for you.
The main point against credit counseling services is that you will often have to pay something for the service. This can put off many people who are already in trouble financially. However, it is important to think long term when it comes to getting out of debt. If you are serious about building a debt free future, it may be worth paying something for somebody who can really help you go about this in the right way.
Credit counseling services may even save you money. For example, they may help you to dispute negative entries in your credit history. This could give you a better credit score, allowing you to refinance your loans at a better rate of interest.
You may be able to find free credit counseling services in some cases. This may depend on what is available in your area. However, even if the service is free, you should expect the counselor to have had some training. There is no point in going to somebody who will give you bad advice.
A trained credit counselor should be able to advise you on such matters as money management, debt consolidation, mortgages and dealing with creditors such as credit card companies. They can discuss bankruptcy and Debt Management Plans (DMP) if those might be appropriate for your situation.
They can also help you to devise a budget so that you can work toward becoming debt free. In short, credit counseling services can be very helpful for anybody who is having trouble managing their finances.