The Basics of Credit Counseling

Credit Counseling (CC) is a great resource for people who are in debt. It allows those in debt to learn how to avoid incurring new debts while getting out of current debt by creating a DMP (Debt Management Plan) and a budget to manage their money effectively.

During the Credit Counseling, you will work along with all of your creditors to come up with a Debt Management Plan that will outline a specific and detailed repayment plan. These plans usually incorporate adjusted interest rates and penalty fees.

When you go to your confidential session with your credit counselor who is trained in budgeting, credit issues, bankruptcy and consumer rights, you will need to assess your outstanding debts and compare it to your household income to come up with a payment plan that allows for rapid repayment of debt.

Benefits of Credit Counseling

By working with a certified Credit Counseling specialist, you will benefit in several different ways:

  • You will create a custom tailored repayment plan that fits your lifestyle, income, and spending habits.
  • You will learn how to manage your money in a more effective manner.
  • You will be taught budgeting skills and spending control tactics.
  • The groundwork for your path to financial freedom will be laid.
  • Depending on your case, you may even be able to take legal action to put a stop to creditor calls.
  • All Credit Counseling meetings are confidential and handled by trained specialists.

How to Get Credit Counseling

When you decide to make that first step towards financial freedom, there are a few ways to apply for Credit Counseling. You can either go to a Credit Counseling office, apply online through one of the approved agencies, or by calling the Credit Counseling offices directly to set up an initial meeting.

After you have called a Credit Counseling agency, you will be informed of all the financial documents, personal documents, and any other paperwork and information that you will need to provide. After you have gathered your documents and set an appointment, you simply go into the office and consult with a Credit Counseling specialist. One thing of note is that the cost of these sessions will vary based on the agency and the state; however, if the services are not free, they will still be offered at a very low cost.

Reputable agencies will provide free information about the services they provide and how they can help you. It is also advisable to check with your local consumer protection agency to see if any complaints have been files against a particular agency before choosing your credit counseling organization. Once you select an agency, they will help you assess your financial situation in order to put you back on track and gain control of your debt.