Credit Counseling Services Help You Succeed
Certified debt counseling helps you find the right path forward.
What is credit counseling?
Credit counseling offers free financial advisement to consumers working to eliminate credit card debt and other debt-related problems. A certified credit counselor evaluates your debt, credit and budget to determine where you stand. Then they help you identify the right debt solution to use in your unique financial situation.
How credit counseling works
There are two main steps to the credit counseling process:
- The first part of credit counseling is 100% free.
- The counselor provides a free debt and budget evaluation.
- They also look at your credit to assess your borrowing potential.
- They walk you through the various options for debt relief available.
- Together, you determine which option is right for your situation.
- If you and your counselor determine that a debt management program is the best solution for you, then the counselor helps you enroll.
- The counselor helps evaluate the monthly payment you can afford.
- Together, you set up a payment plan that works for your budget.
- The counseling team negotiates with your creditors to:
- Reduce or eliminate the interest rate applied to your debt
- Stop future penalties
- Approve the adjusted repayment schedule
- You pay off your debt according to the schedule set, using free resources from the credit counseling agency to help you build healthy financial habits.
- If you have trouble making the payments at any time, you can call the credit counseling agency to help you work through the challenge.
- Completing the program successfully rehabilitates your accounts and credit.
Get to know your credit counseling team
Each month we ask our counseling team a question about the work they do to help consumers get out of debt.
Q: What advice do you have for people who are starting to feel stressed about their debt?
“Before you really starting getting in over your head, call a credit counselor. When people first start to have problems, they sometimes think credit counseling won’t work because they don’t have extra money to pay. But it doesn’t work that way. In most cases your total payments go down. So before you drown, grab for a life preserver. Call Consolidated Credit.”
Robyn, Customer Service Representative
“You have to live within you means. Spend less than you make and don’t try to keep up with the Joneses. They probably have debt problems, too.”
Jamel, Certified Credit Counselor
“In this day and age you need to have credit; that’s the reality of it. But people just need to be very smart about them. You want to show you’re using your credit card, but limit your spending. If you have cash, use it! You should never try to use your credit cards as a substitute for income or a main spending tool.”
Ludole, Certified Credit Counselor
“Don’t max out your credit cards. Pay close attention to your interest rate and if the rate changes call your creditor right away to try and get it back to the original rate. If the interest charges are ever higher than the minimum payment, pay off that card and close the account. It’s not worth it.”
Richard, Customer Service Representative
Featured Ask the Expert: Can credit counseling help with debts already in collections?
This month’s featured video explains how our credit counseling team may be able to assist you with debts in collections. Even if the original creditor writes off a debt, credit counseling may be able to help you. The team can negotiate with third-party collectors, too.
Debts in collections absolutely can be included on a debt management program. If it’s with the original creditor, even if it’s not with the original creditor, in a lot of cases we’re able to get the original creditor to accept the payments back again.
Any card that’s closed and you’re still carrying a balance – any payments that you make directly to the creditor will be applied 100% to the balance. The only thing that may vary by account is whether there’s still late fees or interest being applied.
Most of the benefits from a debt management program come before accounts get charged off – basically before an account gets closed is when we can have the biggest effect on saving you money and helping you get out of debt sooner. Once an account’s closed, it’s charged off – the bank has already written it off, but you still owe them the money, it still shows up on your credit report, and you’re still obligated to make payments.
If it’s sold to a collection agency and now someone else owns it, we can still attempt to help you with them, although it’s not a credit card company and it may be a collection agency that we don’t have a relationship with, it’s included in our service for us to reach out to them and try to work out a payment plan for our clients.
The major benefits of the program really come when you’re working with the credit card companies because they have an interest in seeing you rehabilitated, educated, and they want you back as a customer.
Credit counseling agencies, in general, do not help with removing things that are accurate from a credit report. And, in fact, if you did owe the money and you were behind on it, and even if you make an agreement to pay it, the credit card companies are obligated to report – not why – but if something happened.
How do I know if credit counseling is right for me?
Asking for financial help isn’t always easy. Pride, feelings of embarrassment and a fear of being scammed can weigh heavy, leading to delays in asking for help. On the other hand, procrastination only gives your debt more time to get worse.
Evaluating the benefits of credit counseling
There are five main benefits provided when you work with a credit counselor:
- A credit counselor provides an impartial professional perspective.
- They’re expert negotiators
- They have a variety of free financial resources to offer
- They’re flexible when it comes to help you repay your debt
- The advice they offer is free
Additional resources to help you decide to reach out:
- 5 Tips to Find a Reputable Credit Counseling Service
- 4 Reasons Consumers Need Credit Counseling
- How Free Credit Help Can Work to Boost Your Credit Score