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What Do Credit Counselors Do?

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What Do Credit Counselors Do? 

Getting yourself into credit card debt is easy. Getting out from under that debt is quite another story. When the frustration and fear that comes along with steep credit card debt strikes, it is not uncommon for people to go into flight mode and avoid paying their debts altogether. But ignoring debt won’t make it go away; it will only make it worse. The debt – and calls from creditors – will increase and your credit score will continue to plummet. If you have found yourself in a situation where you can no longer manage your debt, consider seeking the services of a credit counselor. 

Credit counselors provide a number of valuable services to their clients. If you decide to work with a credit counselor, the first thing they will do is examine your income versus your debt and other expenses in order to assess your financial situation. Based on your individual needs, your counselor will be able to suggest a course of action they feel is best for you. Options may include budget management, debt consolidation, debt settlement, or – in the most extreme cases – bankruptcy. Because bankruptcy should always be used as a last resort, your credit counselor will explore all other possibilities first to help bring your debt down. Since professional credit counselors have positive working relationship with credit card agencies, they can work on your behalf to negotiate lower rates, payments and balances with your creditors. This way, creditors get what they need while giving you financial relief each month. As you pay down your balances, your credit counselor will also work with you to provide financial education and set up a personalized budget strategy to help you rein in your spending and make more sound financial decisions. 

When selecting a credit counseling agency, always avoid companies that work on a for-profit basis. These companies often charge hefty fees up front as well as hidden charges and fees throughout the process. They often attempt to attract customers with promises of immediate debt relief and credit score repair. Though these claims can be enticing in times of financial despair, it is important to remember that credit and debt cannot be repaired overnight. It is a process that does take time and should be handled responsibly and in ways that will help you avoid future overspending and debt. 

Instead, look for a reputable non-profit credit counseling services (CCCS). As you look for an agency that is right for you, be sure to one that has been accredited by the National Foundation for Credit Counseling.

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